In Kenya, Vodafone already has signed up 1.6 million customers for the money-transfer service it launched just a year ago.
Last week, Vodafone expanded the service into Afghanistan by partnering with Roshan, that country's biggest wireless firm. Vodafone aims to set up mobile money-transfer services in other developing countries, including India.
"There's potential for mobile banking and payment services in emerging markets because the banking infrastructure just isn't there, but wireless networks are present in broad swaths of these countries," said Daniel Winterbottom, an analyst at market research firm Informa. "People have more access to phone services than they do to banking facilities."
Using cell phones to perform financial transactions isn't a new idea. Wireless firms have eyed mobile banking and "wallet" services for years as a way to boost profit.
They've trotted out services that let subscribers check account balances, pay bills, transfer funds or use electronic money as a cash substitute at retail outlets.
But mobile banking has yet to catch on in the U.S. and Europe. Even in South Korea and Japan, usage is modest compared with popular music and gaming services.
Vodafone, though, sees a need in emerging markets, where brick-and-mortar banks are hard to find outside big cities, analysts say.
The U.K.-based carrier says that typical users of the money-transfer service are workers away from home. They might work in big cities and need to whisk money back to their families in rural areas.
Wireless firms are searching for ways to boost revenue from nonvoice services in developing countries, says Nitesh Patel, an analyst at Strategy Analytics.
"There's pressure on them to find ways of creating more value for customers," Patel said. "Mobile banking services are a way to do that."
In Kenya, Vodafone affiliate Safaricom has set up 1,800 sales agents for the money-transfer service. They include retail outlets where cell phone users normally buy prepaid airtime minutes as well as at gas stations and convenience stores.
Customers bring in real cash, making a deposit to the sales agent that acts as a virtual bank. The money is then credited to the customer's account.
The service sends a text message to the intended recipient of the money. To get the money, a recipient has to go to a nearby sales agent registered with Safaricom.
Vodafone partnered with Citi-bank C to develop the text messaging-based money-transfer service, Patel says.
Almost 20% of Safaricom's 9.2 million subscribers have signed up for the M-Pesa service.
"What we've established in Kenya is that there's a strong appetite (for M-Pesa) in a country where typically large numbers of the population have no bank accounts," said James Moberly, Vodafone's senior manager, mobile payments.
Safaricom is a joint venture between Vodafone and state-owned Telkom Kenya.
Vodafone takes a commission on the money transferred. The commission ranges from 3% to 5%, depending on the amount, analysts say. Vodafone's M-Pesa competes with Western Union WU and other transfer services.
In Afghanistan, where Vodafone doesn't operate its own network, Moberly says Vodafone will share revenue with Roshan and sales agents.
Less than 3% of Afghanistan's population has a bank account, says Altaf Ladak, Roshan's chief operating officer. Roshan has certified 50 sales agents in four cities for the money-transfer service. It plans to have 200 by year-end, says Ladak. Roshan has 1.7 million subscribers.
Vodafone says it might launch the money-transfer system in India, where it has nearly 40 million customers. Patel says Vodafone probably will roll out the service in Eastern Europe as well.
Other wireless firms are moving into mobile financial services in emerging markets.
In the Philippines, Smart Communications has pioneered some mobile banking services, Patel says. Smart is a subsidiary of Philippine Long Distance Telephone PHI.
While Vodafone provides money transfers within the same country, Smart enables migrant workers to send money back to their home countries. Last month, Smart announced a deal with China Banking Corp. and Alahli Bank to serve Filipino contract workers in Saudi Arabia.