Cell Phone Remittances

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Given yesterday’s discussion about the Taliban extorting money from Afghan cell phone providers, I wanted to link to today’s story describing the expansion of such cell phone based payment systems in Latin America. 

Sending money back home? Just press "talk."

That’s what Western Union, Radio Shack and the small wireless carrier Trumpet Mobile hope millions of Hispanic immigrants will do with a new service announced yesterday.

[snip]

Under the plan, a customer could buy a Trumpet Mobile phone, which costs $29.99 at Radio Shack. The user can load the phone with money through Western Union. To send money to a relative Nicaragua, for example, a customer would specify the amount and the recipient over the phone. The money would then be debited from the customer’s account and routed to a local agent in Nicaragua, who would dispense the money to the relative.

I guess that answers my question about whether the Taliban were extorting actual currency or just cell phone minutes.

There are several interesting aspects of this story. Barnett Rubin described the cell phone extortion in Afghanistan as a way to work around Western Union–which was quickly co-opted by US intelligence after 9/11. But here, Western Union is one of the three partners. So I suspect this an attempt to avoid losing any more money transfer business to cell phone carriers.

The story also notes that Western Union offers this service in India and Philippines. So between Kashmir, Colombia, and Philippines’ own Islamic extremists, this puts Western Union in several areas with their own terrorist problems.  

I wonder how involved the US is in backing this venture? Anyone know anything about Trumpet Mobile? 

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8 replies
  1. Alison says:

    Clearly, there is an urgent need for sociologists of finance to explain the construction of this new global market.

    Wow! they had been worrying about the emergence of tamer makets, like fish quotas, but ths one has guns and terrorists and explosions.

    I see an academic shift in the making…

  4. klynn says:

    More here on Affinity and Trumpet mobile (Trumpet is Affinity):

    http://www.paymentsnews.com/

    More on their CEO:

    http://www.reuters.com/article…..RN20080107

    As Chief Executive Officer, Carney to Drive Rapid Adoption of Affinity
    Mobile’s MADE Solution Enabling Mobile Money Transfers (mTransfers), Mobile
    Payments (mPayments) and Mobile Wallet (mWallet) Services

    DALLAS, Jan. 7 /PRNewswire-FirstCall/ — Affinity Mobile, a global
    provider of mobile financial services, today announces that telecommunications
    industry veteran John Carney has joined the organization as chief executive
    officer to lead strategic efforts to drive rapid adoption of their Mobile
    Application Delivery Enablement (MADE) platform. MADE enables true mWallet,
    mTransfer and mPayments capabilities to all sectors that engage in secure
    financial transactions such as mobile network operators, retail merchants and
    financial institutions.
    Prior to joining Affinity Mobile, Carney served as the Senior Vice
    President of Sales and Operations for T- Mobile USA, the fourth largest
    wireless service provider in the U.S. During his ten years with T-Mobile,
    Carney launched prepaid phone service and drove their highly successful retail
    and dealer distribution strategy that ultimately led to a distribution
    organization that supported 25,000 retail outlets and over $14 billion in
    annual revenue. Before T-Mobile, Carney spent 10 years with
    telecommunications companies MCI and Mid-com Communications. In addition to
    his extensive telecommunications experience and success in sales and
    distribution, Carney has deep experience in retail management, supply chain
    management, E-commerce, National Retail, B2B and B2C marketing and operations
    management.

  5. marksb says:

    Much as I’d like to lay some of this on some US company or group, here’s how it was a few years ago: The European telecoms, and the telecom providers like us, were as busy as spring bees trying to invent ways to extract more money from the wireless customer base. I got to sit in on meetings and discuss over bad Swedish meals (and good Swedish coffee) new patents that allowed all kinds of services to happen using the unique ID contained in the SIM chip on your phone, and the global wireless system. We discussed sending payments, using the GSM system to create credit card transactions and thus enabling small business to use the global financial system in countries with nothing but a GSM network. We saw it as allowing some taxi driver in India or port warehouse in Egypt to do modern business. And the migrant worker sending cash home was part of it.
    But of course we never thought about extortion or drug payments. Duh.
    My point is that everyone in the mobile business was paying attention. The pressure in the telecoms is very high to find new revenue and get there ahead of your competition.

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