Leading mobile operators are supporting an initiative aimed at enabling people working outside their home countries to use mobile phones to send money back to their families.

The GSM Association, the global trade body for mobile operators, and MasterCard Worldwide, the US payment processing company, will on Monday announce a pilot programme to allow migrant workers to use cellphones for international remittances, regardless of where they are in the world.

The initiative is led by Sunil Mittal, chairman of Bharti Airtel, India’s largest mobile operator, partly because the country is the biggest recipient of overseas remittances. But it is backed by operators including Vodafone, Cingular, Telecom Italia, as well as groups focused on emerging markets, such as MTN, Orascom Telecom and Turkcell.

Only a handful of mobile operators currently allow customers to make domestic or international remittances via cellphones. However, the potential size of this business is now leaving many companies seeking new ways to expand the sector.

The World Bank estimates that 175m migrant workers made remittances worth $230bn in 2005. Meanwhile, MasterCard estimates more than two thirds of the world’s 6.5bn people do not have access to banking services near home, and the GSMA claims that its initiative could help increase the size of the international remittances market to more than $1,000bn by 2012.

The technology and practical arrangements currently used to remit cash vary. Some operators issue debit cards to enable customers to redeem their cash Others, such as Vodafone, rely on text messages that include personal identification numbers as a means for customers to get their cash.

For its pilot programme, Bharti Airtel will partner with the State Bank of India. Bharti is in the process of finalising arrangements with a mobile operator and bank in another country to test a system of international remittances via cellphones.

Mastercard will act as the clearance and settlement facility between Bharti and the mobile operator located outside India. The GSMA said one of the biggest barriers to use of mobiles for international remittances was the need for a global clearing and settlement hub that can deal with the requirements of multiple mobile operators and banks.

In a separate but related development, Vodafone will on Monday announce a pilot project to enable Kenyan workers living in the UK to use their mobiles for international remittances. Vodafone manages Safaricom, a Kenyan mobile operator, that already allows people living there to use their mobiles to transfer money to each other via text messages.

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