Mobile wallets have turned into vital payment tools for consumers in many African nations thanks to M-Pesa. Hoping to take advantage of this trend, Western Union Co. is expanding its mobile funds-transfer service to Tanzania to accommodate users who also subscribe to Vodacom’s M-Pesa mobile wallet.
M-Pesa is a branchless mobile-banking service that enables consumers to deposit and withdraw funds from network participants that include airtime resellers and retail outlets that serve as banking agents. The service enables users to transfer funds to other users and nonusers, pay bills, and purchase airtime.
Some 14 million consumers have signed up to use the service since it launched in 2007.
“Africa has been the largest adopter of mobile money,” Gregg Marshall, Western Union global head of mobile services, tells PaymentsSource. “The mobile wallet has become a viable alternative [to cash].”
The partnership will let M-Pesa customers wire funds abroad using Western Union’s infrastructure.
Senders need the recipient’s mobile number to initiate the transfer into a recipient’s wallet. Funds are delivered to the mobile wallet in minutes, according to a Western Union press release. Transfer fees vary according to the amount sent.
Western Union also plans to give recipients the option to pick up cash at agent locations.
“We’ve always thought the pickup option would be a good one because it doesn’t require the sender to know the specific mobile number of the recipient,” Marshall says.
How mobile-wallet users can spend funds in their account is up to the mobile network, Marshall notes. Bill pay is the most popular feature in most markets, he adds.
Western Union plans to launch its mobile funds-transfer service in other countries in Africa and in Asia, the Middle East, and Central and South America.
“There is some momentum gathering as more wallet systems are launched and gain steam,” Marshall says.
Telcos have combined to launch some 140 wallets worldwide, he estimates.
“There was a lot of hype surrounding mobile wallets about 10 years ago,” Marshall said. “Over the years, there has been a lot of effort to bring about the required technology and market dynamics to make mobile wallets successful.”
In March, Western Union expanded its mobile service to enable Kenyan migrants to send funds to recipients in their home country (
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