International remittances via mobile phones are expected to exceed $10 billion for the first time this year, according to Juniper Research. However, the research firm says that the cost and complexity of regulating cash transfer had led many service providers to focus exclusively on airtime topups.
According to the report, only a handful of players like eServGlobal’s HomeSend along with established money transfer organizations Western Union and Moneygram were seeing significant traction on mobile. In many cases, early service providers had failed to establish a critical mass of mobile wallets in recipient markets, reducing the opportunity for inbound remittance.
Regulatory complexity is standing on the way of even wider adoption, with service providers facing a number of hurdles along the way, including obtaining licenses for each remittance corridor and risk assessment checks.
Meanwhile, transaction volumes have surged in the airtime topup market, where service providers are not required to obtain money licenses. The average annual airtime topups across key remittance corridors were in excess of average individual mobile spend levels in receiving countries, thereby covering recipient telecommunications bills for the year.
Juniper forecasts that nearly 400 million mobile phone users worldwide will use their handsets for mobile money transfer by 2018.