NBAD to dial 'R' for remittance

Money can be sent home with the push of phone buttons

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National Bank of Abu Dhabi (NBAD) has signed an agreement with MoneyGram International to allow customers to send money home using mobile phones. When the service is introduced customers will be able to send money directly from their accounts with the touch of a few buttons. They will also be able to send money home from pre-paid cards after MoneyGram's systems are integrated with NBAD's existing Arrow mobile phone transfer service.

"An overwhelming majority of expatriates in the UAE remit money to their families in their home countries," said Saif al Shehhi, the senior general manager of domestic banking at NBAD. "The bank wanted to bring to the market a product that serves this large demographic. We worked very methodically for more than a year with our partners to fine-tune the Arrow service to ready it for consumers to use it to conduct international remittances."

The move is the latest in a number of similar investments by UAE-based banks and money exchange companies. An executive at Western Union, the global money-transfer giant, said last month the company planned to invest heavily this year in mobile transfer services. Western Union has already tested mobile-based transactions between the UAE and the Philippines in partnerships with Wall Street Exchange and Orient Exchange.

Etisalat, the UAE's largest mobile phone operator, said in January it would offer a similar service for Indian expatriates. The service may challenge the exchange houses and banks that dominate the UAE's lucrative remittance business. The World Bank says between US$15 billion (Dh55.09bn) and $20bn was sent from the UAE to foreign countries last year. Banks, exchange houses and telecommunications companies see mobile transfer services, and mobile banking in general, as major avenues for expansion.

The UAE has one of the highest mobile phone penetration rates in the world, with about two phones for each person. Industry observers expect mobile devices to be used significantly as electronic wallets in the Middle East, where credit card adoption is lower than in developed regions. This month, Mashreqbank offered its online remittance service over its mobile banking platform to customers free.

"Developing markets have found the right formula for mobile money services, [providing] functions that users want and an ecosystem that can sustain the service," said Sandy Shen, the research director at the technology consultancy Gartner. Qatar Telecom has also announced it will launch mobile remittance this year. The value of mobile payments is forecast to reach almost $630bn by 2014, up from $170bn this year, according to Jupiter Research.

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