When Lucila Sayo, who immigrated to Vancouver 21 years ago to teach preschoolers, wants to send money to her mom back in the Philippines, a simple phone message does the trick.

Sayo can buy a credit for a few hundred dollars from Vancity and send it by text message to her brother, who is one of the 47 million subscribers to the ubiquitous smart phone network there. Within minutes he can exchange the credit for cash for her mom, who lives most of the year with Sayo in Vancouver but still takes extended vacations in her homeland.

Cash transfers are just as easy for Vince Vela of Burnaby, who is supporting his Philippine-born wife while she waits — five years, so far — for the paperwork that will get her into Canada. Ditto for many more British Columbians with family ties to the Philippines — Vancity won’t say precisely how many — who are taking advantage of a new pilot project to transfer money quickly and cheaply by telephone.

In a world where international money transfers to less-developed countries have long been anything but fast or cheap, and where remittances sent from richer to poorer countries are estimated to be in the ballpark of $250 billion a year, the Vancity pilot program has potential significance far beyond mere convenience and modest savings for individual customers like Sayo and Vela.

“Using cellphones for all kinds of useful purposes like this is the way of the future,” says John Richards, a public policy professor at Simon Fraser University who studies development-related issues.

“Many countries have quite sophisticated networks to transfer money internally by cellphone,” Richards said. “But this is the first international transfer system I know of.”

The cost of Vancity’s telephone transfers started out last December at $3 per transaction, and shortly afterward dropped to zero to facilitate the sending of disaster aid after a broad swath of the country was hit by a typhoon and massive flooding. Now it is to rise at the end of the month, as originally planned, to $5.

Previously, Vela was paying only $8 — a bargain by the standards of international money transfers — because both he and his wife were able, although it wasn’t convenient, to get to branches of a Philippines-based bank. Sayo, more typically, was paying $12 to $15 to a commercial firm to transfer amounts as small as $100.

Current figures are hard to come by, but it cost $2 billion a year in transfer fees for immigrants or temporary workers to send $15 billion home, according to a study done five years ago for the Canadian Defence and Foreign Affairs Institute. And a World Bank study done around the same time noted the impact of remittances on poverty reduction is, dollar for dollar, greater than foreign aid because the money gets spent directly on people’s priorities with no overhead.

The amounts involved can also be a lot more significant than foreign aid. Remittances to the Philippines add up to about 10 per cent of that country’s GDP.

And in some countries — Haiti, or Honduras, for example — it can be 20 or 30 per cent or more.

While Vancity won’t say how many people are using the Philippine service after its first few months in operation, Randy Johal, the credit union’s director of international sales and services, did say it has been “well received.”

The Philippines was picked for this trial program, he said, in part because the large Filipino population in Vancouver ensures strong demand. The number of immigrants from the Philippines settling in B.C. in 2010 topped 6,600, beating out India for the first time and ranking second only to China.

Sayo started with a small transfer, just $100, to make sure it worked, and Johal said this is how people typically approach the service. But both the number and size of transactions, which Philippines regulations limit to $950 or less, have grown steadily.

Many other developing countries have established sophisticated internal systems to transfer money by cellphone, but most also have regulations preventing international transfers. Johal said Vancity is considering whether it can expand the service to other countries, but it’s complicated to figure out where.

One factor is local demand. But the degree to which a recipient country’s telephone network has been developed to handle money transfers and the willingness of the country’s regulators to cooperate are also important.

Canadian regulators, on the other hand, aren’t imposing roadblocks. Vancity monitors the telephone transfers in exactly the same way it keeps an eye on other international movements of money, Johal said. Things like an unusual number of transfers to a single source are scrutinized more carefully to guard against money laundering.