Western Union, Ericsson in deal to boost mobile money services

Western Union has entered into a partnership with Ericsson, which is expected to boost volumes of transactions on its money transfer service network and allow headroom to compete with Safaricom on price.


The alliance announced at the Mobile World Congress 2012 in Barcelona, Spain promises to further intensify competition in the now crowded remittances and mobile-to-mobile money transfer services with mobile phone operators on the global landscape.

“The only way we can be able to reduce our unit cost is by increasing volumes and the number of transactions. We believe that this partnership should allow us to do this,” Diane Scott, Chief Marketing Officer and President at Western Union Ventures told the Nation in an interview on the sidelines of the conference.

This comes at a time when Western Union’s dominance in the global money transfer services has come under increasing attack from mobile phone operators worldwide. Phone companies are turning to mobile money transfers as a value added service as well as a means of diversification from the traditional voice service.

Safaricom, which is its main rival in Kenya, has been eating into Western Union’s market share mainly due to price.

According to Ericsson, the partnership enables other mobile network operators using its infrastructure to easily include Western Union Mobile Money Transfers in the service suite of their mobile financial service offers.

“Our business ambition is to accelerate access and interconnection between the m-commerce eco-system and the existing financial world. Through this agreement with Western Union, we are helping mobile network operators and financial institutions get closer to their customers with differentiated wallet services that connect and add value to their consumers,” Ericsson’s president and CEO Hans Vestberg told journalists at the mobile congress Tuesday. The event has attracted over 60,000 participants among them about 3,000 captains of the telecommunications industry from across the globe that use it to give a sneak peek into the future of communication.

The first step of the partnership will be the integration of Western Union’s Mobile Money Transfer Network and Ericsson’s suite of M-Commerce platform to allow mobile network operators operating on Ericsson’s network to launch mobile financial services. The rollout is expected to begin in June.

“Today more than 40 per cent of the world’s mobile traffic goes through Ericsson networks and we support customers’ networks servicing more than 2 billion subscribers,” he said.

Western Union is counting on its large network globally to claw back its market share.


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