Filipinos wire money via cell phone

It’s a common problem in third-world and developing countries: not everyone has access to a bank account. This makes it exceedingly difficult to perform many transactions that we consider routine in the U.S. However, over in the Philippines, they’ve developed a new system: wiring money via cell phone. It’s basically like our Western Union, except it’s more convenient and less costly.

It’s a pretty neat system, really. Money is wired by a bank account holder to a cell phone. That phone’s owner then heads to the local bank, where he or she fills out a form and sends and SMS to the bank’s line. This verifies the transaction, and the money exchanges hands. The fee for such a transfer is just one percent.

It is reported that over 5.5 million people are using this service in the Philippines; it is catching on in other countries, too, such as Kenya and South Africa.

It’s spreading in the developing world because mobile phones are much more common than bank accounts.

So why don’t we have this in the U.S.? It has to be security issues. Hackers would be all over this one, perpetually trying to break the bank’s code. We do foresee that being an obstacle in the future for the Philippines and other users of this technology. But for now, it seems to be working just fine.

[USA Today]

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