The joint venture, dubbed Transfer, will launch in Mexico in the first quarter of next year, available to customers of Citi's Banamex,unit and América Móvil's Telcel, before a wider roll out to the rest of Latin America.

Users will be able to open bank accounts, transfer money, withdrawal from ATMs, shop, receive payments and pay bills with their handsets. Customers will be charged between one and two pesos a transaction.

Manuel Medina-Mora, director general, Mexico and Latin America, Citi, has told the FT that the service could also be used by governments to distribute money to the poor and pay employees.

Last year MasterCard and telco giant Telefónica formed a similar JV to bring mobile phone-based financial services to 12 Latin American countries.