MoneyGram, a large money transfer company, has launched a mobile money transfer app so users can wire money directly from their smartphones. Though it is certainly novel and useful for customers, they are a bunch of Johnny-come-a-latelys.
Mobile money transfer apps available from major transfer firms
Not everyone has a bank account. When a person has to send money to someone who doesn’t or a business that won’t take a wire transfer or a check, they have to use a money transfer service. Western Union is one of the biggest, MoneyGram is another such large service. The latter has more than 284,000 locations worldwide, according to Daily Finance.
MoneyGram is also launching a mobile money transfer app for smarthphone users. In essence it’s a MoneyGram digital wallet; users simply have to open the app and wire money to any MoneyGram location. The app and digital wallet was made in conjunction with Gemalto, a Dutch digital security company that has its own digital wallet platform, LinqUs, which MoneyGram’s app is based on.
Western Union and a number of other money transfer companies likewise have mobile transfer apps available as well.
Johnny come a lately
MoneyGram is kind of late to the game. Western Union has offered its mobile money transfer service since at least 2008 and at the end of 2011, according to NASDAQ, was taking mobile transfers at more around 150,000 locations. That said, MoneyGram is also a larger company than Western Union, having locations in 194 countries.
One of the first money transfer apps came out in 2007, according to the BBC. It was launched by M-Pesa, a money transfer service in Kenya, that had the foresight to put two and two together. Many people in Africa have mobile phones, but few have bank accounts, which spurred M-Pesa to come up with a solution for people who need to send someone a cash advance. Recipients only have to go pick up the cash.
Huge service for foreign nationals
The benefit of MoneyGram’s app for mobile money transfers is mostly for immigrants who want to send money to their home country, according to Gigaom. Remittances from foreign nationals sending money back home accounted for up to 20 percent of the gross domestic product of Haiti, the Dominican Republic, Jamaica and Mexico, often sent from workers in the United States.
It is also often used, illegally, as a method of funding organized crime and terrorism. According to eHow, research into the subject has revealed that wire transfers have been used to fund many such organizations, including the hijackers in the Sept. 11, 2001 attacks. The sheer volume of transactions effectively means transfers to illicit recipients, which are illegal, are lost in the shuffle.