SMS-powered money transfer system arrives in Europe

No smartphone required: Kenyan-developed M-Pesa enables basic banking servicesSeven years ago, Kenyans got access to something that American companies are still trying to figure out—easy, fast, and cheap mobile money transfers. (Seriously, why am I still writing paper checks in 2014?) M-Pesa allows any Kenyan with a cell phone to withdraw, deposit, and transfer money between accounts via basic text messages. No smartphone app, much less a smartphone itself, is required.

The electronic money can be converted into physical Kenyan shillings when a person takes a received code to one of thousands of agents nationwide. The system has been a runaway success in East Africa and has expanded to South Africa, India, and Afghanistan, and more recently to Egypt, India, Lesotho, and Mozambique.

On Monday, Vodafone, the company behind M-Pesa, announced that it would be expanding its offerings to Europe for the first time. People in Romania, one of the lesser-developed members of the European Union, will be able to transfer as little as one new Romanian leu ($0.31) to as much as 30,000 leu ($9,276) via their phones.

“The majority of people in Romania have at least one mobile device, but more than one third of the population do not have access to conventional banking,” Vodafone Director of Mobile Money Michael Joseph said in a statement. “Vodafone M-Pesa is already used regularly by nearly 17 million customers, and we look forward to bringing the significant benefits of the service to the people of Romania.”

To start, Romanians can sign up for M-Pesa at any one of 300 Vodafone stores nationwide. The company plans to expand to 2,000 locations, and the system will include agents who can hand over cash by the end of the year.

Vodafone says that its 16.8 million active customers worldwide make $1.2 billion in person-to-person transactions every month.

Source: Ars Technica

Tags: mobile communications

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