GLOBAL REPORT - Hold on, my wallet is ringing - In developing nations around the world, people who don't have bank accounts use their cellphones to transfer money and even make purchases.
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.
