updated 07:29 am EST, Wed January 22, 2014
Financial service from T-Mobile minimizes, removes typical banking fees
T-Mobile is attempting to take on the banking industry by launching a personal finance service that allows users to manage their funds via smartphone apps. Working with Bancor, Mobile Money allows users to add funds to a prepaid Visa debit card and perform most of the tasks typically associated with a checking account, though for a large number of every-day actions, there will apparently be no fees charged to customers.
The card can be bought through more than 3,000 T-Mobile stores in the United States, with Safeway and other retailers also preparing to offer the card, reports Re/code. It will be usable anywhere Visa is accepted, with no fees applicable to activation, monthly maintenance, in-network ATM withdrawals, and card replacements. The account will also allow for the direct depositing of paychecks, retail purchases, bill payments, and also the depositing of checks by taking a photo with the accompanying app.
The relatively low or non-existent fees, along with a lack of a minimum balance, could make it attractive to the estimated 68 million adults in the US without traditional accounts. "It's ridiculous that families, especially those who can least afford it, have to pay so much for basic check cashing services that many of us take for granted," said T-Mobile chief marketing officer Mike Sievert. "The typical household using a check casher to cash their paychecks could save around $1,500 per year, and customers tired of getting hit with overdraft fees can switch and save an average of $225 a year."
"We've already transformed how Americans use and pay for phones, tablets and wireless service; why stop there?" claimed CEO John Legere, refering to its UnCarrier initiative. Legere continued "Millions of Americans pay outrageous fees to check cashers, payday lenders and other predatory businesses, just for the right to use their own money," suggesting that Mobile Money "shifts the balance of power for T-Mobile customers."
Though many companies have headed into the lucrative business of personal finance, T-Mobile's lack of fees for account actions makes this more a public relations effort than a major business. It could certainly profit from the brand association with the service, potentially attracting Mobile Money users to the carrier over time.