Friday, October 19, 2007

Western Union's new mobile service

Yesterday the GSM Association and Western Union announced that they had struck a deal to bring the Money Transfer Service to mobile.

An agreement to use the GSMA platform does not mean that the service will be available on all if any of the 35 operators networks that are taking part in the scheme.

This is something that I see as a backward step in Mobile Commerce. The introduction of Western Union has to be a backward step. With G Cash in the Far East it is a service that works because it's cheaper to use than Western Union. The same is true in South Africa. Thus in an effort to get traction for a product the GSMA have allowed the fox into the chicken house.

The whole platform in general is something that I see as likely to fail as others GSMA projects have because this is not something that is driven by Operator demand. This like .mobi is something that the GSMA sees as a way to raise income for itself. They have not been able to demonstrate that the consumer or the networks want any form of mobile remittance or mobile commerce product.

In working with the Operators on M-Payment solutions the first thing that they look at is the risk of being seen as a bank. If you start to undertake remittance based payments then you are competing with the Banks on a transaction that has a good profit margin, thus they will ask that you are regulated in the same way as they are. This is something that no mobile operator can accept because of liquidity requirements. However if you were to build a platform that replaced low value transactions and thus reduce the banks cost base then you can work in partnership providing that you have something that is available across all of the mobiles in a particular country. Getting everyone to join a micro payments based service is however very difficult, so far every attempt in the UK has ended in failure.

Now if the GSMA was a trade association rather than a commercial organisation it might be able to do something in the world of payments. This action show that they are about income for themselves even if it does evil.

No comments: