The future of money transfers

Kenyan blogger Bankelele writes about the cash remittance business in Kenya:

Past: Surprisingly, Western Union and Moneygram, which have been recording growing volumes and signing up new banks (like KCB) every month, already represent the past in money remittance. The reason for this is the cost of the transfer... about 15% of amount transferred...

Present: ...I’ll give a friend my Barclays account number, and he’d go to his local Barclays branch, e.g. in Mombasa, or Kisumu, and deposit the money into my account – and I’d be able to withdraw it almost instantly in Eldoret...

Future: The future will be for money transfer via cellphone, as is already taking place in the Philippines and South Africa...

This is important. In our work on the Future of Aid we calculated that a substantial cut in the cost of remittance transfers would raise more money than the entire budget of IDA, the World Bank's concessional lending arm. Here's the graph.