Airtime as Remittances

Jan Chipchase is a Nokia researcher whose objective at the moment is to understand how the poor use mobile phones. At first glance, it shows no direct relation with the issue of remittance but on delving deeper it gets quite clear that the mobile phones used by the poor Ugandans are actually associated with the remittance industry. This is because the Ugandans use prepaid airtime as an informal money transfer mechanism, particularly to get value back to family in rural areas. The Ugandans are using prepaid airtime as a way to transfer money from place to place.

This is one of the most unique business models adopted in the African country facing severe challenges owing to the high level of poverty. The idea is simple. The earning member of the family, who works in a town/city instead of sending money back home, buys a prepaid airtime card valuing the same amount that he would have sent. But instead of entering the code into his own phone he calls up the village phone operator and read the code to her. The operator then uses the airtime of the phone and completes the transaction by giving the beneficiary the money, minus a small commission. Some African countries have already started off this with this unique scheme and others are also expected to follow suit.

Prepaid airtime as a currency substitute is quite costly in percentage terms, due to VAT), and a commission for whoever turns it back into cash. But when the other options also seem more costly, people generally opt for a better option which is more cost effective.

New Direct hiring Policy to aid the OFWs

The New Direct Hiring Policy issued by the Philippine government is going to bring a cheer for the overseas Filipino workers (OFWs) holding top positions by exempting them from paying the bond under it. After a meeting by the governing board of the Philippine Overseas Employment Administration (POEA), the decision to extend the exemptions to OFWs with executive posts was discussed at length. It was then discussed if it was possible to include the professionals not to be covered by the payment of the bond. Those professionals hired directly by the reputable corporations are considered having the best protection and so questions have been raised on whether they should be included in the new policy.

The various aspects of exempting the professionals from paying the US$ 5,000 repatriation bond and US$ 3,000 performance bond stated in the POEA memorandum Circular 04 are being reviewed and the POEA expects to reach a quick decision soon. Reports of the POEA show that majority of the deployed OFWs comprise of the skilled professionals like doctors, engineers, teachers and nurses.

The direct hiring policy has encountered some strong criticism from various migrant workers’ organisations which call it anti OFWs.

Mi Pay signs mobile money ecosystem contract with African operator

Mi Pay, a mobile payments provider and an East African operator have signed a contract to provide a mobile money ecosystem to the operator’s subscribers to gain from international remittance services and supporting a network of agents to support domestic payments made by mobile.
Mi Pay’s Streetvendor solution lets African mobile operators to empower local agents in Africa to buy or sell airtime to subscribers which in turn helps the entrepreneurial networks to grow. The solution allows agents to complete transactions from a mobile handset directly without the need for extra terminals. The direct channel top up service allows subscribers in Africa to gain airtime via their handsets which removes the need for physical vouchers.

This move is surely going to benefit those who have family members or friends living abroad and would also help the third parties to purchase prepaid airtime to be sent to subscribers in Africa.

CitiBank launches QuickRemit

With a view to expand its share in the global remittance market CitiBank acquired PayQuick this January. PayQuick, a brainchild of an Indian immigrant was launched in 2002. US immigrant workers sent home around $42.8 bn in 2007 and 73% of Latin Americans based in the US send an average of 10% of their pay checks back home every month. Traditionally wire transfers and online money transfer companies have been the preferred choice for remittances in countries like the US and Canada. QuickRemit is now aimed at removing the hassles involved in online money transfer. Often remitters face problems in terms of delays and the high fees associated with the money transfer agencies/companies. QuickRemit promises to remove these hassles and offer a user friendly service to the subscribers.

QuickRemit is in compliance with the anti terrorist and anti laundering regulations issued by the US. It offers a technology platform that removes the regulatory constraints and offers a simple hassle free service. It allows its customers to reach over 90 countries which is predicted to be the industry standard for sending remittances internationally.

With this Citi joins the league of banks like Bank of America, HSBC and Wells Fargo who have launched remittance solutions in the recent past.

Recruiters push for OFW bank

The Filipino recruitment firms have welcomed the idea of creating a special bank to cater to the needs of the overseas Filipino workers (OFWs). The vice President of the Federated Association of Manpower Exporters (FAME) said that it was high time for the OFWs to have their own bank to serve their financial needs. This comes at a time when the OFws are reeling under the pressure of the depreciating dollar.

FAME has recommended that the OFW bank should set exchange rates friendly to OFWs to enable the beneficiaries to get maximum value for the foreign currencies they receive. It was also suggested that the service charges of the ATMs be dropped. The Land Bank in the meanwhile is learnt to be interested in managing the proposed bank for the OFWs. The Overseas Workers Welfare Administration (OWWA) could invest P1 billion in the project as preferred shares while the Land Bank and DBP could invest P350 million each.

Paybox and Celcom come together to launch new mobile payments and banking solutions in Malaysia

Malaysia based Celcom Berhad and Paybox, the well known company for mobile payment solutions have come together to launch a mobile banking and mobile payment solutions for the Malaysian market. E banking has a diverse presence in Malaysia till now. Just a few banks provide m banking solutions to their customers to enable them to access their e bank systems using a Java client on their phone. As most customers do not have Java enabled phones the benefits remain unused. Celcom is aiming at providing a simple platform for m-banking and m-payments. The idea is to allow the customers to access their accounts at any bank at a minimal investment by the participating banks.

In its initial stage Celcom will enable mobile access to the Celcom-TuneMoney Prepaid VisaCard. The card holders will get to check their balances, transaction details and recharge their prepaid airtime and transfer money to each other. The plan is to expand the system and provide extended remittance, bill payment and merchant payment services at a later stage.

With this Paybox aims at expanding its base in the South East Asia. The Paybox solution is provided to Celcom through its partner Idot TV Sdn Bhd. Idot TV is a technology enabler for mobile solutions and value added services. It has operations in Malaysia, Indonesia, Bangladesh and Cambodia.

PLDT launches VoIP offering for the OFWs

The Philippine Long Distance Telephone Co. (PLDT) has recently its own Voice over Internet Protocol (VoIP) facility for the overseas Filipino workers (OFWs). The move is expected to hit the international long distance (ILD) business but the company is hoping to attract more users because it will offer lower rates of $0.14 a minute. The service would require the users to download software into their computers which would target the Filipinos living abroad. In the first quarter of 2008, PLDT reported a continued decrease in international long distance revenues which has been accounted to the negative effects of the stronger peso. The ILD revenues continued to decrease as the dollar linked revenues were adversely affected by the 16% appreciation of the average US dollar-peso exchange rate in 2008.

With this VoIP service which is more or less similar to the services offered by Skype and Vonage, PLDT is expected to re gain its customer base. Dubbed as the PLDT Talkpad the service will allow the PLDT and Smart subscribers to call and send SMS to PLDT Talkpad subscribers at domestic long distance rates.