“There are over 1 billion people in emerging markets today who don’t have a bank account but do have a mobile phone,” said Rob Conway, CEO and Member of the Board of the GSMA. “This represents a huge opportunity and mobile operators are perfectly placed to bring mobile financial services to this largely untapped consumer base. Based on the initial findings of research conducted with the microfinance centre CGAP and McKinsey & Company, we believe that mobile money for the unbanked has the potential to become a US$5 billion market opportunity over the next three years.”

The MMU programme will fund regulatory and market research to help overcome some of the barriers of providing these services and demonstrate the business case for serving this market. The programme includes a US$5 millionfund to catalyse a new wave of mobile money innovation, encouraging mobile network operators to create new services for previously unbanked people in emerging markets. The MMU programme will support approximately 20 projects in developing countries, focusing on Africa, Asia and Latin America, with the goal of reaching 20 million previously unbanked people with mobile financial services by 2012.

“Traditional financial services are often too costly and inconvenient for people who earn less than US$2 a day to obtain, and too expensive for banks to provide,” said Bob Christen, director of the Financial Services for the Poor initiative at the Bill & Melinda Gates Foundation. “Technology like mobile phones is making it possible to bring low-cost, high-quality financial services to millions of people in the developing world so they can manage life’s risks and build financial security.”

Truphone has already integrated Google Talk^™, Skype^™, Windows Live Messenger^™ and Yahoo! ^® Messenger into its applications for these devices, blending voice and IM across multiple platforms, and reaching over 800 million addressable accounts for free.

“Our goal is for mobile phone users to be able to reach any contact on their buddy lists, at any time and at no cost, using just one application,” said Geraldine Wilson, Truphone CEO. “We will keep integrating more services and functionality, on other platforms too, giving people everything they need to stay in touch, all within the Truphone application.”

When not in Wi-Fi range, iPhone users can still exchange calls and messages with Skype and Google Talk users for the cost of a local call*, using the Truphone Anywhere feature. Voice calling will be added to AOL IM, Windows Live Messenger and Yahoo! Messenger within months.

In a separate development, Truphone today began accepting PayPal credit as a method of prepayment for calls out of its network. This addition makes it easy for people without major credit or debit cards to benefit from Truphone’s low calling rates to over 200 countries.

Said Wilson: “With PayPal we found not only a payment processing service, but also an addressable community that matched up very nicely to the typical Truphone customer.”

Customers may refill credit to their Truphone accounts via handheld, web site, or phone. They can also choose to automatically top up when credit has fallen to a specified level.

In Kenya and Turkey, millions of people use phones to send money or access their bank accounts; in Japan, more than 50 million people, or about half of all cell phone users, already carry phones capable of serving as wallets.

The technology for paying with cell phones by flashing them near reading equipment in stores or on public transport is ready, and the initial feedback is good, said Mary Carol, head of mobile in Visa Europe .

“Trials show that consumers overwhelmingly like it,” Carol said. “The biggest problem has been the business model.”

It will also take at least until 2010 before phones equipped with such technology are widely available, and the financial industry and telecom operators need to agree on some kind of revenue and role split, industry executives say.

The meeting of the two industries will be one of the key topics next week at the Mobile World Congress trade show in Barcelona.

“Both — the financial sector and telecom operators — want to own the relationship with the client, this is one of the hottest issues,” said Juha Murtopuro, chief executive of Valimo Wireless, which provides cell phone identification technologies.

Murtopuro and other industry players said they expect a compromise to be eventually found, with solutions to vary from market to market.

But the ingredients are already there, given the number of consumers already owning both a mobile phone and bank account.

“Consumers are customers of multiple parties. This is something very typical also in our core industry,” said Art Kranzley, chief technology officer at Mastercard .

EMERGING MARKET OPPORTUNITY

For many consumers in emerging markets, their first banking transactions will likely be done through cell phones.

“All the pieces are coming into place for mobile banking to transform the way some 1.5 billion people get banking services in emerging markets,” said Elizabeth Littlefield, head of CGAP, a policy and research center seeking to improve financial access for the world’s poor.

In Kenya, 5 million people have signed up in less than two years to use Safaricom’s M-Pesa service, which enables people to send money to each other.

CGAP said M-Pesa is 45 percent cheaper than other transfer services, with 83 percent of users seeing a “large negative impact” on their lives if they did not have the service.

In Turkey, some 2 million transactions — most of them cash withdrawals from ATMs — were made last year using Turkcell’s mobile service.