Mobile Remittances: A Study of the Philippines and Tonga

Paper
Date Published: 
Dec 2009
Author: 
Porter, S.

Assessing market potential for mobile remittance services in Tonga

This study presents a comparative analysis of the development of mobile remittance services in the Philippines and Tonga.

Remittances are an important source of income for the Philippines as well as Tonga. Mobile remittances have the potential to address some of the problems of remittance flows. The Philippines has used this potential to leverage benefits from its economic migrants. Tonga has not been as successful, suffering from high direct and indirect costs as well as a large informal market for transfers.

The study examines the importance of mobile remittances to development, identifies its success factors and examines potential markets for mobile remittance services in Tonga. The study reveals that:

  • Remittances and financial services consumers in Tonga exhibit similar characteristics as those in the Philippines;
  • Philippines and Tonga vary in terms of commercial viability and potentially successful business models;
  • Policy reform is needed before a mobile remittance or mobile money service could start up in Tonga;
  • Government capacity to implement reform would be improved by cooperation with external development partners and the private sector.

 

Type: 
Paper
Countries: 
Philippines, Tonga