Money transfer by cellphone planned

Western Union Co. said Thursday that it was teaming up with cellphone service providers to develop a system that would allow consumers to transfer money from country to country using mobile phones.

Western Union has successfully tested cellphone money-transfer services in a number of U.S. cities. It will work with the GSM Assn., an international trade group of cellphone service providers, on commercial and technical issues to enable services to be offered internationally.

The money-transfer company, based in Greenwood Village, Colo., expects to launch its mobile service in the second quarter of 2008. It would connect a cellphone user to a Western Union operator, who would complete the transaction using special software.

Thirty-five members of the trade association will participate in the program, which will be headed by Sunil Mittal, chairman of Bharti Airtel of India.

“This initiative will bring down the cost of lower-value and high-frequency mobile remittances considerably and also enable smaller amounts to be transferred in a fast and secure fashion, thereby benefiting millions of people in the developing world,” Mittal said.