Vodafone strikes MoneyGram M-Pesa deal, as Misys buys mobile banking expertise

Vodafone and financial software provider Misys made separate moves in the mobile payment and banking sectors this week, at a time when analysts say the future of the industry remains up for grabs.

Vodafone announced an alliance with global money transfer and payment services firm MoneyGram covering cash transfers to customers using the operator's M-Pesa mobile payment service. Transfers can be arranged through one of MoneyGram's 334,000 agents in 200 countries, or via a mobile app for iOS, Android, and Windows 8 operating systems.

Rollout is due to begin in the second quarter and be completed by the end of 2014, a Vodafone statement revealed.

M-Pesa launched in 2007 and had nearly 16 million active customers by end-September 2013. The service is currently available in Democratic Republic of Congo, Egypt, Fiji, India, Kenya, Lesotho, Mozambique, South Africa, and Tanzania--countries where at least half of the population lack access to traditional bank accounts, according to the World Bank.

Vodafone noted that most users come from low-income, rural, areas, and are looking for cheap money transfer options. Customers can also use M-Pesa to pay utility bills, and buy food.

Michael Joseph, Vodafone director of M-Pesa, said an estimated $90 billion (€65.8 billion) worth of money transfers are made using the service each year, and the MoneyGram partnership "provides the most extensive global network and greatest number of access points for consumers wishing to transfer funds to M-Pesa users."

MoneyGram SVP of global product management and emerging channels, Alex Hoffmann, said the alliance "furthers our goal of joining with fast and reliable mobile wallets so consumers may send money for life's essentials anywhere and any way they want, simply and conveniently."

UK-headquartered Misys, meanwhile, is beefing up its mobile money expertise by acquiring IND Group, a provider of online and mobile banking services since 1997.

The financial software company said the purchase adds consumer-oriented services to its suite of products for banks, at a time when mobile banking is taking off.

"The market for digital banking is exploding. More than half a billion people already use mobile devices for personal banking and this is set to double in the next four years," Misys CEO, Nadeem Syed, said.

Alex Kwiatkowski, head of IDC Financial Insights Europe, said the acquisition comes at a crucial time for mobile financial services. "2014 is set to be the year when financial institutions begin the process of deciding upon their core systems transformation strategy, and digital channels will be an intrinsic element in this planning activity."

Earlier this month, David Sear, CEO of Weve – a mobile payments joint venture between Vodafone UK, EE and O2 UK - warned that the mobile industry must recognise the need to enter into full partnerships with banks and retailers to make mobile financial services a success.

Without such partnerships, "we'll be waiting for another 10 years for adoption of mobile payments at scale," Sear said.

For more:
- see Vodafone's MoneyGram announcement
- see Misys' acquisition release
- see the M-Pesa launch release

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