Transferring funds safely and securely using mobile phones has the potential to revolutionise the way people around the world utilise their money, and it holds the promise of driving great social benefits in the developing world.
But perhaps its most important attribute lies in the short term: mobile operators have a significant opportunity to draw further revenue from existing network investments.
According to a recent study by ABI Research, the mobile fund transfer market will see a near US$8 billion revenue opportunity for mobile operators by 2012 -- from just over US$10 million in 2006.
Several carriers lead the way with national and international services, most notably in the Philippines, but the largely third-party offerings in the US remain small and niche.
"Early US and European mobile fund transfer services have focused on limited demographics --primarily students and their family benefactors -- but there remains enormous potential for developing a user base through key partnerships, combining mobile operators and financial services companies," said Jonathan Collins, principal analyst with ABI Research.
The ability to transfer funds between accounts, customers, and retailers in a simple manner -- using mobile handsets and the wireless network -- represents a significant prospective market for mobile operators, financial services organisations, governments, retailers, and end-users.
End-users understandably are cautious about who they trust to handle their money, so established banks and mobile operators will help to provide much of the security that new users look for in mobile transfers. "This places mobile operators who are willing to deliver money transfer applications at the forefront of a lucrative range of applications," added Collins.
Len Rust is publisher of The Rust Report.