Telefónica to launch m-banking with I-ADB

Spanish operator Telefonica will launch m-banking services to economically challenged countries in Latin America. Developed in partnership with the Inter-American Development Bank (I-ADB), the new m-banking initiative targets the 175m people in the region who use mobile phones but have no banking access.

The project is scheduled for launch in Q3 2008. Additionally, the company has signed the Business Call to Action Declaration, which endorses the company as a supporter of the development goals and commits it to tangible development action alongside governments and other organisations. Telefonica currently provides mobile communications services in 13 Latin American countries.

Telefónica says more than 65% of the population in Latin America has no access to banking services. In contrast, mobile phone penetration is now around 70% in the 13 countries where Telefónica operates - up from 45% two years ago.

Matthew Key, CEO, Telefónica Europe says the project aims to "improve financial access in Latin American markets by providing an m-banking solution to some of the most vulnerable in society - those groups that do not currently have access to banks or financial services."

A new report from microfinance body the Consultative Group to Assist the Poor (CAGP) says m-banking, although not yet living up to the hype it has created, has the potential to reach large numbers of poor people who are outside the formal financial system. The organisation calls for the development of interoperable payments platforms, practical and risk-based approaches to regulation, as well as shared networks of cash-handling agents.