Western Union Co. and the Canadian payments technology provider EnStream LP will test a person-to-person mobile transfer system starting in December.

EnStream developed the Zoompass Mobile Wallet that lets consumers send mobile domestic fund transfers. Under the partnership announced Monday, Zoompass users will also be able to send funds to more than 200 countries where Western Union has a presence.

The Toronto mobile commerce company is a joint venture between three major Canadian wireless carriers, BCE Inc.'s Bell Canada, Rogers Communications and Telus Corp.

EnStream charges no fees to transfer funds through Zoompass within Canada. But once it integrates the service with Western Union, consumers will pay a fee for international transfers that will vary depending on destination. Western Union, of Englewood, Colo., would not say how much it plans to charge.

Zoompass is a downloadable application tied to either a bank account or credit card and works on most smartphones. To send money to other countries, users will have to upgrade to a version that features the Western Union capabilities.

Robin Dua, EnStream's president, said the international funds transfer service will serve a need. "Canada is a very large remitter of funds to other countries, because of the diverse population of the country," he said in an interview. Canadian consumers have family and friends living in international markets, "so this system makes it easier for them to send funds without having to visit a Western Union location and fill out paperwork, and they can send the funds from home, work or while on the road."

In Canada, 48% of 1,000 people who send money abroad that Western Union polled online in April said they likely would sign up for a mobile remittance service, and 17% said they would definitely use the service.

Domestically, many Canadian consumers use funds transfer services to pay babysitters, nannies or friends to whom they owe money, Dua said. Being able to pay through a mobile phone eliminates the need to visit an ATM or bank to get cash or write a check.

This type of service most likely will "replace cash over time as more consumers adopt smartphones. I really think we will see a day when consumers will not have to visit an ATM or write checks to send money," he said.

With the new service, recipients of the funds transfers are notified through e-mail or text message and may pick up the money in cash at any Western Union location. They also may have the funds deposited directly into their mobile phone account if their country provides a similar electronic wallet service, Brian Fox, a Western Union senior vice president and the general manager for Canada, said in an interview. Consumers in the Philippines, Kenya and South Africa already may deposit transferred funds into their mobile wallets, Fox said.

"Person-to-person payments are really starting to take off, and mobile technology is one way to allow for this to happen," said Adil Moussa, an analyst for Aite Group.

And Western Union is smart to link another payment option to a mobile phone and to partner with a company that "can allow it to offer fund transfers on a wider basis to countries like Canada and others with a large remittance," Moussa said.

Additionally, "consumers will adopt this type of technology, as it is the way of the future," especially because "many international consumers do not have Internet access and have to rely on their phones for the bare necessities, which include communications such as fund transfers," he said.