A new partnership between the World Council of Credit Unions and Boom Financial, a Palo Alto,Calif.-based company that provides mobile banking and moneytransfer services to immigrant and unbanked families, could pumpnew life into credit unions in developing countries.

Founded four years ago, Boom gives underbanked and unbankedconsumers the ability to activate a Boom bank account, receive aprepaid card and transfer money to anyone in the world via amobile transaction. Through the partnership–which the two partiesannounced on Sep. 11–money transfer recipients will get messages ontheir mobile devices directing them to a nearby credit unionbranch, where they can access the money. Once they've visited abranch, the credit unions will have the opportunity to market otherproducts and services to their new, potential members.

The alliance, which represents Boom's first step into the creditunion industry, originated at a recent conference where leadersfrom WOCCU and Boom met and discovered they had very similarphilosophies–to provide secure financial services to unbanked andunderbanked populations through the use of mobile technology,explained Pete Kelly, Boom's vice president of businessdevelopment, and Saul Wolf, WOCCU's manager of remittanceservices.

“The reason why we were interested in Boom is because what worksfor the banked doesn't work for the unbanked, and Boom understandsthis,” Wolf said. “So many companies get it wrong by looking at thetechnology and saying that if they build it, they will come, butthat isn't the case for our service areas. And it's not just aboutmoney transfers. We're both interested in greater financialinclusion for these populations.”

Kelly said Boom chose to zero in on mobile banking servicesbecause the company found that the majority of U.S. immigrants–thecompany's target population–regularly use mobile devices thatthey've brought to the U.S. from their native countries. He saidthis population often deals with cash and utilizes alternativebanking services. And mobile technology addresses their need tosend money to loved ones living in their native countries. Thecompany has also noticed, Kelly said, that those who havediscovered the benefits of mobile banking via Boom's servicestypically desire services from a traditional financialinstitution.

“We live in a cash economy, but challenges exist due toproximity, and that's where mobile comes into play,” Kelly said.“Boom can be considered the PayPal for everyone else. Much of theglobal population is unbanked, but we find that our customers dowant to be banked.” 

Boom allows customers to open an account in the U.S. or Mexico,and while all customers can complete transfers and use their Boomprepaid cards to withdraw cash at ATMs, only U.S. customers canload cash onto their prepaid cards and use them to shop atparticipating stores. Mexico customers have the option ofpurchasing items at participating stores with funds acquiredthrough a Boom money transfer and can receive cash back. Thecompany's money transfer services are free of charge, but it doescharge customers an annual membership fee of $25 and fees of $2 to$3 to load or withdraw money with a prepaid card. Boom's mobileservices can be accessed from older mobile phone models, not justsmartphones, Kelly pointed out.

As a result of the partnership, the 51,000 credit unions thatserve 196 million people around the world and are served by WOCCUwill have the opportunity to increase membership, assets and loanvolume without adding more branches, Wolf said.

Another goal WOCCU and Boom hope to reach is to provide unbankedand underbanked populations with comprehensive financial servicesthat they may not otherwise receive. Wolf said while some mobilebanking service companies focus solely on transfers and payments,Boom has its hand in the concepts of mobile accounts, saving andlending.

“We're trying to provide dignity to the little person,” Wolfsaid. “We want the services to be convenient, provide meaningfulaccess and allow people to achieve their dreams.”

Wolf added that the partnership's benefits align with WOCCU'sobjective of giving a strong voice to credit unions in developingcountries.

“We want credit unions in the developing world to have a seat atthe table in the shaping of new products and services, and we wantto provide people who are unbanked with dignity, safety andconvenience,” Wolf said. “Credit unions are great promoters ofthose values.” 

For Boom, the partnership equals a connection to the nearly 200million people serviced by WOCCU.

“WOCCU allows us to expand faster and serve a more relevantaudience in a safe manner,” Kelly said. “It's a strong technologyand compliance partner.”