Sep 24 , 2010

Western Union in alliance with EnStream

By Robin Arnfield, News Editor

Western Union has announced a strategic alliance with EnStream, the Canadian developer of the Zoompass Mobile Wallet, which will enable Zoompass users to send cross-border and Canadian domestic money transfers directly from their cellphones.

EnStream is a mobile-commerce joint venture between Bell Canada, Rogers Communications and Telus, Canada's three largest wireless operators. Zoompass offers Canadians a way to send, receive and request digital currency within Canada using their cellphones.

The new Western Union service will allow Zoompass users in Canada to send funds directly from their mobile wallets. Recipients will be able to pick up their funds in cash at more than 380,000 Western Union agent locations in 200 countries and territories.

“We are looking to launch prior to Christmas this year,” EnStream spokesperson Rob McNabb tells Payments Business. “There are a significant amount of people from the Asia corridor here in Canada who send money back home to family and friends. We expect them to make up a large part of our international transactions.”

McNabb says that Zoompass clients in Canada will be able to make mobile-to-mobile transactions to customers of cellphone operators with whom Western Union has launched Mobile Money Transfer services. “Upon launch of the Zoompass-Western Union service, we will offer Mobile Money Transfers to customers of telcos such as Globe Telecom and Smart Communications in the Philippines,” he says.

According to EnStream, the launch of the service later this year will mark the first time that Canadians can send cross-border mobile money transfers with Western Union. Mobile users can currently send and receive money within Canada using the Zoompass wallet application for the Apple iPhone, BlackBerry, Android, and other devices. The Zoompass Wallet application can be downloaded by visiting on a mobile device or on the web.

According to the Canadian Wireless Telecommunications Association (CWTA), there are approximately 23 million mobile subscribers in Canada, and roughly 75 percent of Canadian households have access to a cellphone. In addition, according to a survey conducted in Toronto by Western Union in April 2010, 48 percent of international money-transfer senders said they were likely to sign up for mobile transaction services, and 17 percent would definitely use mobile money-transfer services. Many global migrants living in Canada send money home to countries such as the Philippines, Jamaica, the United States and India.

Western Union's Mobile Money Transfer service is currently available in 25 countries, allowing users to visit a participating Western Union Agent location and send funds directly to the mobile "wallet" of Smart Communications and Globe Telecom subscribers in the Philippines. In addition, consumers can visit select Western Union Agent locations in the UK to send money directly to Safaricom M-PESA subscribers in Kenya. And in Malaysia, Maxis M-Money users can now send funds directly from their mobile phones for payout at any participating Western Union Agent location worldwide, and, where available, to other mobile wallets.

“The announcement should be viewed as a logical progression for both Western Union and EnStream, rather than any sort of important breakthrough,” Rob Burbach, Senior Analyst, IDC Financial Insights Canada, tells Payments Business. “For EnStream, international P2P payments fit naturally with the existing domestic P2P Zoompass platform. Western Union is seeking to continue to dominate the international remittances market and has established many partnerships, including one with Scotiabank in Canada.”

However, Burbach warns that international remittances are a niche payments market in Canada. “While it is true that 75 percent of households in Canada have mobile devices, only a little more than 20 percent have devices capable of running the application EnStream provides,” he says. “And it is probable that for immigrant workers sending remittances home to relatives internationally, their ownership rates of smartphone devices capable of running the application are significantly lower. While this will change over the next couple of years as smartphone market share continues to grow, this announcement now has done a good job of keeping both EnStream and Western Union in the spotlight.”

"Until now, our alliances have been with mobile operators in developing countries, where people have fewer options when it comes to financial services,” says Brian Fox, Western Union's Senior Vice President and General Manager for Canada. “This is our first strategic alliance with a mobile operator consortium in a country where 96 percent of the population has a bank account. We look forward to working with EnStream on this important initiative and other international mobile projects in the future."






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