Convenience store chain 7-Eleven is part of the network for a new mobile banking service that lets users transfer money between mobile phones using SMS.

Boom addresses the needs of unbanked or under-banked consumers who often pay high fees to transfer money to family members in other countries. Boom account holders can load, withdraw and spend money at 75,000 locations across the United States and Mexico.

“Boom is focused on the cash consumer in the U.S.,” said Bill Barhydt, CEO of m-Via, Palo Alto, CA.

“For those who traditionally use Western Union and MoneyGram to transfer money as well as check cashing services, we are offering a new type of bank account that allows them to send money from a mobile phone in real-time to consumers in the U.S., Mexico and any country we support,” he said.

“The recipient also becomes banked through the mobile phone.”

Partner network
In addition to being able to transfer money, Boom users can also make purchases and withdrawals at participating merchants and automatic teller machines.

Boom customers pay $25 per year to use the system and $2 every time they load money. There are no additional fees connected to money transfers.

M-Via, which developed Boom, has built an extensive partner network where members can load money, withdraw money, and make purchases from their Boom accounts.

Launch partners include the Allpoint ATM Network, the Diconsa retail network in Mexico and PayXchange in addition to 7-Eleven.

Through these partners, Boom members have access to more than 15,000 U.S. cash load locations, 23,000 Boom merchants in Mexico and over 150,000 Boom ATMs in the U.S. and Mexico as well as 650,000 ATMs in more than 150 countries.

The Boom mobile account works like a prepaid mobile banking account with consumers’ mobile phone numbers functioning as their bank account number.

When a Boom user sends money to a mobile phone number that Boom does not recognize, an account is automatically created for that consumer, with the account set up completed by Boom calling the recipient.

To load money into a Boom account, users can go to a network location such as a 7-Eleven store and hand money to a store associate at the cash register. Over 7,000 7-Eleven stores are currently live with the program and more will be added in the near future.

Once the money is loaded, users receive a text message telling them what their new balance is.

Right now, Boom only supports cash load at retail locations. However, in the first quarter of 2012, m-Via expects to add direct deposit as a feature.

Two ways to spend
Recipients in Mexico have two ways of spending the money they receive via a Boom transfer.

Network merchants will accept the Boom mobile wallet account as a form of payment. This is accomplished by transferring money to the store account. Boom debit cards are also available that consumers can connect to their mobile wallet by sending a text message.

M-Via is working with community centers, town associations and other grassroots organizations to help promote Boom.

The company has been testing the mobile banking solution for 3 ½ years.

“There was an incredible amount of technology and merchant building that had to happen,” Mr. Barhydt said.

“The core feature is that this is one hundred percent accessible via text message,” he said.

“The lowest common denominator is text messaging. The average recipient outside the U.S. has a low to midrange feature phone and many customers in the U.S. still have a feature phone.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York