san miguel, philippines -- It's Thursday, so 18-year-old Dennis Tiangco is off to the bank to collect his weekly allowance, zapped by his mother -- who's working in Hong Kong -- to his electronic wallet: his cellphone.
At a branch of GM Bank in the town of San Miguel, Tiangco fills out a form and sends a text message via his phone to a bank line dedicated to the money transfer service.
In a matter of seconds, the transaction is approved and a teller gives him 2,500 pesos ($54), minus a 1% fee. He doesn't need a bank account to retrieve the money.
More than 5.5 million Filipinos now use their cellphones as virtual wallets, making the Philippines a leader among developing nations in conducting financial transactions over mobile networks.
Mobile banking services, which are also catching on in Kenya and South Africa, enable people who don't have bank accounts to transfer money easily, quickly and safely. It's spreading in the developing world because mobile phones are much more common than bank accounts.
The system is particularly useful for the 8 million Filipinos -- 10% of the country's citizens -- who work overseas and send money home, such as Tiangco's mother, Anna Tiangco. Previously, she sent money via a bank wire transfer, which took two days to clear. The cellphone method is nearly instantaneous.
"The good thing here is, wherever my children are, they can text me and I can send money immediately," she said by telephone from Hong Kong.
Consumers also can "store" limited amounts of money on their cellphones to buy things at stores that participate in the network -- though this practice isn't yet widespread in the Philippines.
Many more Filipinos use their phones to send airtime values, called loads, to prepaid subscribers. A parent, for example, can send a 60-peso load to replenish a child's cellphone.
Japanese and South Korean consumers have been using cellphones as virtual wallets for several years, but their systems use a computer chip in the handset that enables them to make purchases by waving the phone in front of a sensor. The Philippine system relies on simple text messages.
The 41 million cellphone users in the Philippines are avid texters. Text messages played a key role in mobilizing crowds that fueled the 2001 "people power" revolt that ousted President Joseph Estrada.
The Philippines' two biggest mobile service providers, Globe Telecom and Smart Communications, have harnessed this penchant for text messaging to enable consumers to enter the world of e-commerce.
Tapping into the cash flow from overseas Filipinos -- who sent home $12.7 billion last year -- Globe and Smart forged partnerships with foreign mobile providers and banks, as well as with local banks and merchants, to create a network that enables users to send and receive cash internationally.
When Anna Tiangco wants to send cash home, for example, she goes to a branch of her local mobile phone provider, Hong Kong CSL Ltd., where a clerk credits her cellphone with the amount she has brought with her. She then transfers the money to family members via text messages -- in essence instructing her providers to transfer money from her balance to the recipients she indicates.
If a cellphone loaded with cash values is lost or stolen, the money can be tapped by using the owner's personal identification number. Control over the funds can be restored with a replacement electronic identification module from either mobile provider.
The system was "built for remote payments and for the unbanked markets," said Rizza Maniego Eala, president of G-Xchange, Globe's subsidiary in charge of its G-Cash money transfer service.
Eala said her company's 500,000 G-Cash users transfer about $100 million monthly, but she declined to say how many transactions involved remittances from overseas.
Smart offers a slightly different money transfer system, used by about 5 million Filipinos, that links cash or a debit card to a cellphone.
Users load phones with money via text messages. The accompanying debit card, which costs 200 pesos but does not require a bank account, can then be used to purchase goods in establishments that accept MasterCard, or to withdraw cash from an ATM.
Smart Communications spokesman Ramon Isberto says that every time the recipient spends the money, the sender receives a transaction message. That enables the sender to see how the funds are used.
"The added value there now is that Filipinos overseas have greater control over their funds. Believe me, that is important to them," he said.
Smart and the United Arab Emirates' leading telecommunications operator, Etisalat, have agreed to provide money transfer service to hundreds of thousands of Filipinos in the Middle East. Smart also will soon launch a remittance system in Bahrain in partnership with MTC-Vodafone and Ahli United Bank there, and Banco de Oro in the Philippines, Isberto said.
"The bank products remain clearly bank products. We positioned ourselves as an enabler for banks and other financial institutions to provide products and services to their customers in ways they would otherwise not have been able to," he said.
Aside from transferring cash and making purchases, both Globe and Smart also enable their users to pay bills with their phones. Anna Tiangco said she paid her family's electric bills in San Miguel from Hong Kong via text messages, just like she sent money.
"Even if we are far apart, it's like we are still together," she said. "This is like my wallet now."