In a recently published Working Paper “The Global Financial Crisis and Workers’ Remittances to Africa: What’s the Damage?” Adolfo Barajas, Ralph Chami, Connel Fullenkamp, and Anjali Garg estimate the impact of the global economic crisis on African GDP via the remittance channel during 2009-2010. The data and it’s interpretation forecasts remittance declines into African countries of between 3 and 14 percentage points, with migrants to Europe hardest hit while migrants within Africa relatively unaffected by the crisis. The estimated impact on GDP for relatively remittance-dependent countries is 2 percent for 2009, but will likely be short-lived, as host country income is projected to rise in 2010.
The paper is available for download at http://www.imf.org/external/pubs/ft/wp/2010/wp1024.pdf
Monday, 15 February 2010
Sunday, 14 February 2010
Mobile Payments - How "Square" works
A facinating look at how "Square" operates. Is this the future of mobile payments?
Saturday, 13 February 2010
Credit Card payments on a Mobile Phone - Is this the future?
"Square" is a new add-on for a mobile phone that enables anyone (whether they own a business or not) to accept credit card payments with their iPhone or iPod touch.
Take a peek. Is this the future of payments?
Take a peek. Is this the future of payments?
Friday, 12 February 2010
European Union Parliament kills SWIFT deal
The European Parliament has voted to scrap a controversial agreement to allow US authorities access to EU banking data transmitted over the international SWIFT network.
In November 2009 European Union ministers agreed an temporary nine-month deal to continue letting US anti-terror investigators access details of bank transfers conducted over SWIFT.
The decision to overturn the agreement follows intense US lobbying ahead of Thursday's vote.
Last weekend in an interview with the German magazine Spiegel, Adam Szubin, the US treasury department official in charge of the Terrorist Finance Tracking Program, said that US tapping of SWIFT banking data had helped to identify and break-up a number of potentially deadly terrorist cells operating in Europe. He warned of serious diplomatic consequences, as well as security gaps, if Parliament were to veto the program.
But EU Parliamentarians were unconvinced by the appeals, expressing concerns that the deal failed to protect the privacy of EU citizens.
In the final vote, political leaders in Strasbourg voted 378-196 against the deal, with 31 abstentions.
The European Commission said it will need to explore with the US treasury department the extent to which there is scope to negotiate a long term EU-US TFTP agreement.
Commissioner for Home Affairs, Cecilia Malmström states: "I remain convinced that the program enhances the security of our citizens: it would be the role of the Commission to make sure that all the relevant safeguards for EU citizens' privacy and data protection are duly included in any possible future agreement. In spite of this set back, I hope we will be able to agree a text in the near future that will give us greater security, more data protection and a useful cooperation tool with US authorities.
"Following today's vote in the European Parliament, we will have now to reflect together with our US partners on the possible negotiation of a new agreement".
In November 2009 European Union ministers agreed an temporary nine-month deal to continue letting US anti-terror investigators access details of bank transfers conducted over SWIFT.
The decision to overturn the agreement follows intense US lobbying ahead of Thursday's vote.
Last weekend in an interview with the German magazine Spiegel, Adam Szubin, the US treasury department official in charge of the Terrorist Finance Tracking Program, said that US tapping of SWIFT banking data had helped to identify and break-up a number of potentially deadly terrorist cells operating in Europe. He warned of serious diplomatic consequences, as well as security gaps, if Parliament were to veto the program.
But EU Parliamentarians were unconvinced by the appeals, expressing concerns that the deal failed to protect the privacy of EU citizens.
In the final vote, political leaders in Strasbourg voted 378-196 against the deal, with 31 abstentions.
The European Commission said it will need to explore with the US treasury department the extent to which there is scope to negotiate a long term EU-US TFTP agreement.
Commissioner for Home Affairs, Cecilia Malmström states: "I remain convinced that the program enhances the security of our citizens: it would be the role of the Commission to make sure that all the relevant safeguards for EU citizens' privacy and data protection are duly included in any possible future agreement. In spite of this set back, I hope we will be able to agree a text in the near future that will give us greater security, more data protection and a useful cooperation tool with US authorities.
"Following today's vote in the European Parliament, we will have now to reflect together with our US partners on the possible negotiation of a new agreement".
Thursday, 11 February 2010
Remittances – Regulator query leads to PayPal suspending payments to and from India
PayPal said a ban on personal transactions to and from India will continue for "at least a few months" while the online payment service tries to resolve a problem with local regulators.
"We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India," PayPal said.
The company is working with regulators and bank processing companies to resolve the problem as soon as possible, it said. But "personal payments to and from India will be suspended for at least a few months until we fully resolve the questions from the Indian regulators."
"We realize that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal," the company said.
PayPal notified users on Saturday that personal payments to and from India had been suspended, as well as transfers to local banks. Customers can still make commercial payments to India, but merchants can't withdraw funds in rupees to local banks, the company said.
On Tuesday it said customers should be able to withdraw funds to a local bank within a few days. But for now it can do nothing to facilitate personal transactions.
The problems may have been triggered by a marketing push that promotes PayPal as a way to send money abroad. The campaign - which reads "As low as $1.50 to send $300 to countries like India" - may have caught the attention of Indian regulators, the source said.
Some Indians use PayPal to receive payments for services in the country such as software development. The suspension of payments appeared to catch many by surprise and has generated more than 150 pages of comments in an online discussion thread.
Some expressed frustration that PayPal had apparently suspended payments without warning, and said they learned only from buyers that payments from overseas had been returned.
PayPal processed more than US$4 billion of payments in the Asia Pacific region in 2008, a PayPal spokesman said. Its largest market in that region was Australia. The company processed $60 billion in payments worldwide in 2008.
"We temporarily suspended these services to respond to enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India," PayPal said.
The company is working with regulators and bank processing companies to resolve the problem as soon as possible, it said. But "personal payments to and from India will be suspended for at least a few months until we fully resolve the questions from the Indian regulators."
"We realize that this is causing considerable inconvenience to our customers and I want to reassure you that this is a top priority for the leadership at PayPal," the company said.
PayPal notified users on Saturday that personal payments to and from India had been suspended, as well as transfers to local banks. Customers can still make commercial payments to India, but merchants can't withdraw funds in rupees to local banks, the company said.
On Tuesday it said customers should be able to withdraw funds to a local bank within a few days. But for now it can do nothing to facilitate personal transactions.
The problems may have been triggered by a marketing push that promotes PayPal as a way to send money abroad. The campaign - which reads "As low as $1.50 to send $300 to countries like India" - may have caught the attention of Indian regulators, the source said.
Some Indians use PayPal to receive payments for services in the country such as software development. The suspension of payments appeared to catch many by surprise and has generated more than 150 pages of comments in an online discussion thread.
Some expressed frustration that PayPal had apparently suspended payments without warning, and said they learned only from buyers that payments from overseas had been returned.
PayPal processed more than US$4 billion of payments in the Asia Pacific region in 2008, a PayPal spokesman said. Its largest market in that region was Australia. The company processed $60 billion in payments worldwide in 2008.
Wednesday, 10 February 2010
Mobile Money Launched in Rwanda
The Governor of the National Bank of Rwanda Mr. Francois Kanimba has presided over the launch of MTN Mobile Money to the media at MTN Centre in Nyarutarama in Rwanda. This new mobile banking product which is compliant with local banking regulations, is a convenient, secure and affordable way of sending and receiving money anywhere from anywhere in Rwanda.
Customers on the MTN network can now sign up for MTN Mobile Money and begin transacting at will through the 120 agents that have been appointed and that located across the country. Those who are not on the MTN network are also able to receive money.
Mr. Khaled Mikkawi, the CEO of MTN Rwanda, described the launch as one of the most innovative initiatives that has been made available to Rwandans in recent times: ‘We have a network reaching over 90% or the population and it is only right that we leverage this coverage for a common good product that will go a long way in the financial deepening of the Rwandan economy.’
MTN pioneered mobile banking in South Africa in 2005 in a partnership with Standard Bank and commercially launched in Uganda in March 2009. MTN Rwanda has partnered with BCR as the key driver financial institution.
Mr. Mikkawi expressed his gratitude to the Governor of the National Bank of Rwanda and the team at the bank for their resolute support with which we would not have been able to launch: ‘I cannot thank the Governor enough for accepting our invitation to preside over this launch to the media. Sir we are humbled by you enthusiastic support and grateful for the opportunity MTN has to play a lead role in the economic and social transformation of Rwanda.’ The National Bank of Rwanda has played a central role in ensuring the product and the project complied with banking regulations.
MTN Rwanda partnered with the largest specialist mobile financial services provider, Fundamo. Fundamo’s leadership team has a strong background in the financial services industry and has applied the stringent design principles required for secure banking systems, whilst also taking full advantage of the unique characteristics of the mobile phone and the mobile user experience. This new style of mobile financial system represents a powerful convergence of the rigor of banking systems and the convenience, simplicity and ubiquity of mobile.
MTN Rwanda also work with Oscillyte Ltd, a consultancy firm that provides specialist strategy, marketing and product development skills and knowledge to organizations’ active in the telecommunications market and mobile in particular. The firm’s lead consultant Mark Guthrie has been Project Manager for MTN Mobile Money.
MTN Rwanda has planned an extensive communication campaign to sensitize the public on the benefits of MTN Mobile Money which include:
* Depositing cash into client’s account at Mobile Money agent outlets
* Sending and receiving money from the convenience of a mobile phone
* Managing ones Mobile Money account
* Withdrawing cash at any MTN Mobile Money agent location.
Customers on the MTN network can now sign up for MTN Mobile Money and begin transacting at will through the 120 agents that have been appointed and that located across the country. Those who are not on the MTN network are also able to receive money.
Mr. Khaled Mikkawi, the CEO of MTN Rwanda, described the launch as one of the most innovative initiatives that has been made available to Rwandans in recent times: ‘We have a network reaching over 90% or the population and it is only right that we leverage this coverage for a common good product that will go a long way in the financial deepening of the Rwandan economy.’
MTN pioneered mobile banking in South Africa in 2005 in a partnership with Standard Bank and commercially launched in Uganda in March 2009. MTN Rwanda has partnered with BCR as the key driver financial institution.
Mr. Mikkawi expressed his gratitude to the Governor of the National Bank of Rwanda and the team at the bank for their resolute support with which we would not have been able to launch: ‘I cannot thank the Governor enough for accepting our invitation to preside over this launch to the media. Sir we are humbled by you enthusiastic support and grateful for the opportunity MTN has to play a lead role in the economic and social transformation of Rwanda.’ The National Bank of Rwanda has played a central role in ensuring the product and the project complied with banking regulations.
MTN Rwanda partnered with the largest specialist mobile financial services provider, Fundamo. Fundamo’s leadership team has a strong background in the financial services industry and has applied the stringent design principles required for secure banking systems, whilst also taking full advantage of the unique characteristics of the mobile phone and the mobile user experience. This new style of mobile financial system represents a powerful convergence of the rigor of banking systems and the convenience, simplicity and ubiquity of mobile.
MTN Rwanda also work with Oscillyte Ltd, a consultancy firm that provides specialist strategy, marketing and product development skills and knowledge to organizations’ active in the telecommunications market and mobile in particular. The firm’s lead consultant Mark Guthrie has been Project Manager for MTN Mobile Money.
MTN Rwanda has planned an extensive communication campaign to sensitize the public on the benefits of MTN Mobile Money which include:
* Depositing cash into client’s account at Mobile Money agent outlets
* Sending and receiving money from the convenience of a mobile phone
* Managing ones Mobile Money account
* Withdrawing cash at any MTN Mobile Money agent location.
Tuesday, 9 February 2010
Remittances - Western Union sees 4% revenue drop in 2009
Money transfer services provider Western Union has seen its Q4 2009 revenue rise 2 percent to USD 1.3 billion compared to the same interval of 2008, with constant currency earnings per share (EPS) of USD 0.32, compared to USD 0.34 in the fourth quarter of 2008.
For the full 2009 year, Western Union has seen its revenue drop by 4 percent compared to 2008 to USD 5.1 billion, with EPS worth USD 1.21, compared to 2008 EPS of USD 1.24. The company also saw its volume of cash provided by operating activities reach USD 1.2 billion for the whole of 2009.
In 2009, Western Union’s cross-border consumer-to-consumer (C2C) money transfer market share rose from 17 percent in 2008 to an estimated 18 percent in 2009, while its number of agent locations has grown to over 410,000.
For 2009, the C2C segment represented 85 percent of Western Union’s revenue at USD 4.3 billion, a decrease of 4 percent from 2008. Operating income was down 4 percent and operating income margin was 27 percent, which compared to an operating income margin of 27 percent in 2008.
The EMEASA (Europe, Middle East Africa and South Asia) region, which represented 45 percent of Western Union revenue, reported a revenue decline of 1 percent and transaction growth of 10 percent compared to 2008. India revenue grew 11 percent and transactions increased 22 percent for the year.
The Americas region, which represented 32 percent of Western Union revenue, reported a revenue decline of 9 percent and a transaction decrease of 3 percent for the entire 2009. In the domestic money transfer business, revenue declined 14 percent and transactions declined 5 percent. Mexico, which was 6 percent of Western Union revenue for the year, had a revenue decline of 15 percent and a transaction decline of 12 percent.
The APAC (Asia-Pacific) region, which represented 8 percent of Western Union revenue, increased revenue by 5 percent on transaction growth of 18 percent during the year. China revenue increased 1 percent and transactions increased 4 percent compared to 2008.
For the full 2009 year, Western Union has seen its revenue drop by 4 percent compared to 2008 to USD 5.1 billion, with EPS worth USD 1.21, compared to 2008 EPS of USD 1.24. The company also saw its volume of cash provided by operating activities reach USD 1.2 billion for the whole of 2009.
In 2009, Western Union’s cross-border consumer-to-consumer (C2C) money transfer market share rose from 17 percent in 2008 to an estimated 18 percent in 2009, while its number of agent locations has grown to over 410,000.
For 2009, the C2C segment represented 85 percent of Western Union’s revenue at USD 4.3 billion, a decrease of 4 percent from 2008. Operating income was down 4 percent and operating income margin was 27 percent, which compared to an operating income margin of 27 percent in 2008.
The EMEASA (Europe, Middle East Africa and South Asia) region, which represented 45 percent of Western Union revenue, reported a revenue decline of 1 percent and transaction growth of 10 percent compared to 2008. India revenue grew 11 percent and transactions increased 22 percent for the year.
The Americas region, which represented 32 percent of Western Union revenue, reported a revenue decline of 9 percent and a transaction decrease of 3 percent for the entire 2009. In the domestic money transfer business, revenue declined 14 percent and transactions declined 5 percent. Mexico, which was 6 percent of Western Union revenue for the year, had a revenue decline of 15 percent and a transaction decline of 12 percent.
The APAC (Asia-Pacific) region, which represented 8 percent of Western Union revenue, increased revenue by 5 percent on transaction growth of 18 percent during the year. China revenue increased 1 percent and transactions increased 4 percent compared to 2008.
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