The Bill and Melinda Gates Foundation is hoping to help workers in developing countries have access to mobile banking. Teaming up with the GSM Association, a global mobile consortium, the Foundation has created Mobile Money for the Unbanked (MMU) to research and create programs for the unbanked. “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 of the GSMA. The Gates Foundation provided a $12.5 million grant to help develop around 20 mobile banking initiatives in Latin America, Africa, and Asia. The program, part of the Gates Foundation’s Financial Services for the Poor initiative, hopes to serve 20 million people by 2012.

Conway believes that mobile banking could be a $5 billion market within the next three years.

M-banking is cheaper for both businesses and consumers, cheaper to set up than are banks, with fees that are less than checking accounts ore wire transfers.

“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 of the BMGF.

“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.”

While mobile banking is still in its nascent phase, countries such as Brazil and Kenya have had success with it. As mobile technology continues to spread even in the poorest countries, it is believed that m-banking will become a big, and valuable, industry.

"Mobile banking can move beyond simple transaction accounts to offer a flexible platform that will meet poor people's needs, while at the same time providing a new source of growth for providers," said Elizabeth Littlefield, CEO of CGAP, an independent policy and research center dedicated to advancing financial access for the world's poor.

"All the pieces are now coming into place for mobile banking to transform the way people get banking services in emerging markets."

By Mark Alvarez