M-via Inc. has rolled out a service called Boom designed to provide immigrants with a low-cost, safe alternative to high-fee funds-transfer services, the mobile-payment network provider announced Nov. 15.
“Our goal is to kill the Western Union MoneyGram cash-services model,” says Bill Barhydt, m-Via CEO. “Citi is the bank of the rich world. I look at migrant populations as being the middle of the pyramid. I want to be the bank in the middle of the pyramid.”
That market is the $60 million annually that U.S. workers send to their families in other countries. Where traditionally immigrants use wire transfer services that cost $20 or more, “I want to eliminate all those fees, which come to tens of billions of dollars a year, and make all those people part of the traditional system that gives them access to all the kinds of commerce they should have,” Barhydt says.
M-Via has partnered with the State Department on a Diaspora Engagement Alliance that helps consumers in migrant communities learn how to become entrepreneurs and find investment opportunities. On Nov. 14, they launched an idea marketplace where entrepreneurs from the Diaspora community can get their best ideas sponsored and where m-Via will provide banking services.
Boom is a bank account that uses the customer’s phone number as the account identifier. It enables consumers to store and access funds via text message and to send funds to other Boom accounts.
If a member sends funds to the phone number of someone who is not a member, m-Via instantly creates an account for that person. Users pay no transaction fee, although they do pay a $25 annual fee for the Boom account. M-Via also charges merchants a transaction fee. But both fees come to less than what existing mobile-payment players such as Western Union charge, according to Barhydt.
To enable customers to fund their accounts, m-Via has built a “load network” at 15,000 U.S. locations, including 7-Eleven convenience stores, bill-payment network PayXchange locations and supermarket chains.
M-Via serves as the agent of CBW Bank, a 119-year-old wholesale merchant bank based in Weir, Kan. It has worked out compliance issues such as USA Patriot Act Know Your Customer rules.
“We’re our own account processor; we help the bank with regulatory filings,” Barhydt days.
The accounts come with a debit card usable on the Shazam electronic funds transfer and MasterCard Worldwide networks.
To access cash in their Boom account, urban and U.S. users can use MasterCard’s Cirrus ATMs. M-Via has built an agent network for those living in extremely rural locations where no ATM is deployed within an hour’s drive. In Mexico, this includes 25,000 village store locations where customers can purchase products and get cash back by sending a text message to the store’s phone number. (Mexico receives $27 billion a year in funds transfers from the U.S.)
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