India's Grameen Solutions, an affiliate of Nobel Prize winner Muhammad Yunus' Grameen Bank, this week teamed with Obopay, a for-profit mobile payment company based in California, to bring banking to a billion poor people using cell phones.
'Today, it's difficult to reach these people,' Obopay India executive director Aditya Menon, quoted by an Associated Press report, said. 'If you solve that problem, you are enabling them to enter the economy.'
The joint venture plans to launch pilot programs in India and Bangladesh in October and aims to reach 1 billion people globally by 2018, in large part by keeping costs ultra low, possibly through the help of charitable foundations, the Associated Press report said.
Obopay, whose partners include Verizon Wireless, Citigroup, BlackBerry maker Research In Motion Ltd. and AT&T, is already active in the US, where customers who want to send money pay â‚¬(US$0.10) per transaction.
After opening an Obopay account, you can transfer money between bank accounts, credit cards and phones via text messages.
Obopay founder and CEO Carol Realini did not say what transaction fees would be for India and Bangladesh.
The announcement comes at a time of increasing convergence between telecom and financial services, especially in the developing world, where far more people have access to cell phones than banks. Mobile banking services have proven popular in the Philippines, Kenya and South Africa, for example.
The payoff could be big for companies providing these services. People who are now 'unbanked' in China, India and Brazil alone could generate â‚¬ (US$85 billion) in banking revenue by 2015, according to an estimate by the Boston Consulting Group.