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obile phone operator PT XL Axiata is collaborating with financial service company Western Union and mini market chain Alfamart to provide mobile-based remittance services to Indonesia customers.

Dian Siswarini, the director for technology, content and new business at XL, said that the remittance service was an expansion of mobile money services available under the XL Tunai program.

XL Tunai is the operator’s mobile wallet service. These virtual wallets can hold a maximum of Rp 5 million (US$515), in accordance with rules set by Bank Indonesia (BI).

Dian added that XL’s remittance service targeted the company’s subscribers who had family members working overseas, notably as migrant workers.

“This service will aid those working overseas, especially in Malaysia and Saudi Arabia, in sending money to their relatives in a fast, safe and easy way,” she said during the launch of the service on Monday.

Under XL’s service, migrant workers can send money from Western Union offices directly to the mobile wallet accounts of XL subscribers. XL subscribers can then withdraw cash or use the balance for purchases at nearby Alfamart mini markets, XL centers or XL retail partners.

Dian added that through this service, XL aimed to extend financial services to 60 percent of the Indonesian population who were considered “un-bankable”.

Yessie D. Yosetya, XL’s senior general manager for mobile finance and innovation, said that at least 250,000 XL subscribers utilized the operator’s XL Tunai services. “With this additional remittance service, we aim to increase that number to 2 million this year,” she said.

She said the operator had not established firm targets on the number or value of transactions sent through the remittance service, given that such transfers were less frequent than domestic transfers. “We are still focusing more on building up an ecosystem for these services,” she said.

Yet, she added that people generally remit amounts of Rp 1.5 million on average through Western Union.

“We hope that, with the smaller fees we charge, people will send in money more often,” she said.

She added that the cash withdrawal fee, including at Alfamart, was Rp 5,000 for the withdrawals less than Rp 200,000. The fee for cashing out funds between Rp 200,000 and Rp 5 million was Rp 10,000.

The operator hopes mobile finances will contribute 20-25 percent to the overall revenues collected through digital services by 2015.

Gregg Marshall, the global head of mobile services at Western Union Ventures, said that his company joined up with XL — the first such collaboration in Indonesia — to provide more choice for money transfers.

Western Union has operations in at least 200 countries.

“We are focusing on countries where most remittance transfers happen, such as Singapore, Hong Kong, Malaysia and Saudi Arabia,” he said, referring to countries where most Indonesian migrant workers live.

Bambang Setiawan Djojo, the director of information technology (IT) at Alfamart, said that the cash out service would be initially available at their mini markets in Java.

“Around 6,000 of our 7,100 mini markets are located in Java,” he said.

He said the challenge was in training Alfamart attendants in processing transactions under the new system. “Each mini market has at least 8 staffers who we have to educate on this system,” he said.