Founded in 2001, Singapore-based Utiba's vision is, “Empowering everyone to make mobile payments,” based on the belief that soon, mobile users can pay for goods and services using their mobile handset, to anyone, anywhere and any time only by knowing the recipient's mobile number.

In his book, Fortune at the Bottom of the Pyramid, Indian entrepreneur, consultant and management expert Coimbatore Krishnarao (CK) Prahalad and a Paul and Ruth McCracken distinguished university professor of Corporate Strategy at the Ross School of Business of the University of Michigan proposed that the engine for the ext round of global growth and prosperity would be the world's five billion people who live on less than US$2 per day, since the viability of this market had already been proposed by various private and state funder enterprises.

Not only has this “bottom-of-the-pyramid” (BoP) market delivered profitability for enterprises but their economic inclusion had resulted in spurts of growth at macro economic levels as well.

The inspiration behind Utiba's initiatives and solutions, is its capability to reach out to the BoP and provide them with the means of financial and economic inclusion, such as by enabling micro finance institutions to service small farmers and entrepreneurs in remote areas.

It's mobile payments technology has enabled foreign workers and emigrants to transfer funds to their family and friends, whenever they want to at a fraction of the cost of conventional systems.

Today, Utiba's clientèle comprises 26 mobile network operators, banks and government agencies across over 15 countries.

These include Maxis M-Money in Malaysia, Globe Telecom in the Philippines, Airtel, BSNL, Shyam & SmartTV in India, Hutch & UGen in Sri Lanka, Indosat& Axisworld in Indonesia, Mobifone & mService in Vietnam, Telcel in Mexico, Emtel in Mauritius, Citicell in Bangladesh, True in Thailand, Telma  in Madagascar and others.

The Philippines experience

We spoke by phone with Utiba senior vice-president Gregg Marshall and Rizza Maniego-Eala, president, G-Xchange, Inc (GXI), a wholly owned subsidiary of Globe Telecom, the Philippines second largest mobile network operator with over 26 million subscribers. GXI pioneered the revolutionary model in cardless and cashless mobile commerce service called GCash, launched in the Philippines in October 2004.

According to USAID, the Philippines is the world’s pioneer and leader in mobile phone banking and mobile money systems, with monthly mobile money transactions worth 13 billion Philippines pesos and that country has exhibited outstanding performance in terms of effective use of mobile phones, mobile money and mobile phone banking services.

Both Marshall and Maniego-Eala spoke at the Asia Pacific Mobile Money Transfer Conference in Manila last December.

"GCash is primarily a mobile-commerce (m-commerce) system which employs secured SMS to initiate and complete a mobile commerce transaction. It also handles all other kinds of mobile payments be it phone to phone, over the Internet and with establishments like stores and Banks,” said Maniego-Eala. “It's used for payment disbursements, salary, bills, school fees payments, loan payments, buying prepaid load, local and international funds transfers via SMS,” she added.

It employs Triple Data Encryption Standard (3DES) encryption which uses three 56-bit encryption keys between the special SIM toolkit SIM issued by Globe Telecom and the transactions server.

According to Maniego-Eala, banks adopt it because it reduces remittance costs and it also reduces the commission on sums received by beneficiaries from an estimated 6 to 7% of the sum remitted by traditional means, to 1% using GCash.

Redemption can be made from the over 3,000 G-Xchange outlets upon presentation of valid identification matching the registered data on the phone.

Registration is made on-air from the phone to activate the user's mobile wallet, which can be topped up via SMS at a G-Xchange outlet, from an ATM machine or at a participating bank.

A consumer wallet can only hold up to US$800 at any one time, while partners and merchants have a merchant wallet which must be pre-loaded via GXI. For example, a school could receive the equivalent of US$50,000 in fees via GCash, which is settled by GXI through payment into its accredited bank account. Today, G-Xchange has 1.2 million users in the Philippines.

GXI also partners with brick and mortar remittance companies, as well as web-based remittance companies such as Western Union and Xoom.Com.

Founded in New York in 1851, Western Union soon had the monopoly in telegraph networks and service spanning the United States where it was the first communications empire. Twenty years later it introduced telegraphic money transfers over its extensive network, which has since been discontinued and replaced by its proprietary web transfers and today it has around 400,000 agent locations in 240 countries and territories.

Xoom.Com is a web based global money transfer service with payments made via debit card, credit card, PayPal or via payment at a bank.

In July 2009, GXI acquired a 40% stake in Philippines bank, now renamed BPI Globe Banko, which will also provide savings accounts, micro-financing and other services to its mobile wallet subscribers.

While Utiba provides the technology, GXI and Globe Telecom share their experience of its use in the real world.

According to the GSM Association, there were 130 mobile wallet systems worldwide as of the end of 2009 and it expects that there would be mobile wallet systems in every country within the next five years.

The World Bank through Consultative Group to Assist the Poor is looking at using the technology to help the poor, as well as the Asian development Bank, the Bill & Melinda Gates Foundation and others.