Western Union Co. is testing a service that lets people in the United Kingdom send funds directly to mobile phone users in Kenya.
The service, announced Monday, is not Western Union's first mobile remittance effort — it began working this year with mobile network operators in the Philippines, a major remittance receiving market — but the project is Western Union's first with Vodafone Group PLC, the world's largest telecommunication company.
Matt Dill, a senior vice president and the head of Western Union Digital Ventures, said the Englewood, Colo., parent company plans to focus on top network operators worldwide, major remittance corridors, and "mobile hot spots" for its money transfer services.
"If you look at the portfolio of the brands involved, you begin to see how the market is moving," Mr. Dill said. "Our strategy is pretty straightforward. It's about executing and developing commercial models."
In Kenya, a nation of 38 million people, Western Union is tapping into "arguably one of the most impressive success stories in mobile money," Mr. Dill said.
In March of last year Safaricom Ltd., a Kenyan network operator partially owned by Vodafone, launched the M-Pesa service, which lets Kenyans to transfer money domestically via text message. Today more than 4 million of Safaricom's 10 million customers use the service, Vodafone said.
"That kind of usage is not something we see anywhere else in the world," Mr. Dill said. "Where there is a demonstrated demand in a nascent market, we want to work with them."
The test that began Monday is starting small. A Vodafone spokeswoman said the test involves a half-dozen Western Union agent locations in the Reading market, an area of the United Kingdom with a high concentration of Kenyan immigrants.
Those customers can designate a recipient phone in Kenya, the companies said, and the transfer is typically completed within minutes. Recipients can withdraw the cash at any of 4,000 M-Pesa agents or forward it to another handset in Kenya.
Vodafone said an electronic wallet application on recipients' phones can hold up to 50,000 Kenyan shillings, about $600.
"This is the first time we've been involved in international remittances," the Vodafone spokeswoman said.
The regulatory compliance issues involved can be daunting, she said. "That's another good reason for us to be working with an experienced company like Western Union."
A spokeswoman for the British Financial Services Authority said it has shifted in the last year and a half to a more principle-based system for monitoring companies on issues such as money laundering.
"We operate from the premise that a company is in the best position to ascertain its financial crimes risk," she said. "They should be able to demonstrate to us that they are taking the appropriate steps to manage those risks."
Western Union announced a mobile transfer partnership in October with Orascom Telecom Holding SAE of Cairo, which has 77 million subscribers in six African and Asian countries. (The companies did not say then when they expected the services to become available there.)
Western Union also is offering mobile money transfers domestically in the United States through a partnership with RadioShack Corp. and Trumpet Mobile, a prepaid wireless division of Affinity Mobile LLC of Dallas.
Vodafone also has introduced the M-Pesa service in Tanzania and Afghanistan.
Mr. Dill said it was premature to discuss Western Union's plans for offering mobile remittances in other markets.
