A New Type of Remittance Connected to Facebook: Roamware's Social Top-Ups

U.S.-based Facebook users can now send phone minutes abroad to friends and family members in India, Philippines and Mexico, thanks to a new service called Social Top-Ups from Silicon Valley-based Roamware. It could form the basis of an innovative form of remittances to these emerging markets, and help Facebook on-board new mobile users who are unfamiliar with the web or computing. The process is pretty simple. You log-in to Social Top-Ups through Facebook, enter the name of your friend (whether or not they belong to the social network), type in their phone number, choose an amount up to roughly $20, then pay with either a credit card, debit card or PayPal. Roamware has built a Facebook platform integration that lets the sender post status updates about their transactions to their Wall. Roamware limits users from sending more than $100 worth of minutes a day. While $20 or $100 may not seem like much, it is in a country like India where the GDP per capita is $1,124 a year, according to the International Monetary Fund. Social Top-Ups works with more than a dozen carriers in India including Airtel, BSNL, Vodafone, Reliance India and Tata Cellular. In Mexico, the project works with Telcel, Iusacell and Movistar and then in the Philippines, it includes Globe Telecom, Smart and Sun Cellular. There is a small fee associated with the transfer but Roamware doesn't specify how large it is; but 100 rupees buys about 80 minutes of talk time and 600 rupees purchases about 8 hours of talk time on Reliance, which appears consistent with prepaid rates listed on the carrier's website. (We've requested comment from Roamware, but have not heard back.) Roamware's service could be powerful in cash-centric economies where there is low credit penetration. In these markets, mobile minutes are sometimes used as an alternative form of currency because they're easy to transfer remotely or in specific increments. India, Mexico and the Philippines are also all economies that are dependent on remittances. Remittances to India made up $20.5 billion in the third quarter of this year, according to the country's central bank. Migrant workers sent $10.63 billion in the first half of this year to Mexico and these types of capital flows make up more than one-tenth of the Philippines' overall GDP, according to Bloomberg. It may also be less expensive than sending cash overseas through Western Union, which has fees that average out to be around 6 percent, according to The New York Times. Plus, the recipient has to go to a physical Western Union branch to receive the cash instead of getting it virtually on their phone. The other benefit to Facebook is that it might help the company attract users in developing countries who have never touched the Internet or a computer and rely primarily on their mobile phones. Social Top-Ups can also send minutes to non-Facebook users, with a message telling them to join the network. In the last year, Facebook has adapted its growth strategy to focus on the billions of users overseas in emerging markets where fixed-line broadband is expensive or difficult to reach. If Facebook users in developed countries send minutes to relatives abroad who have yet to sign up for the social network, it could be a powerful source of growth.

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A New Type of Remittance Connected to Facebook: Roamware's Social Top-Ups

Kim-Mai Cutler

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Kim-Mai Cutler