On Wednesday, the wireless provider made its latest show of bravado by announcing that it's dipping its toes further into banking -- offering a prepaid Visa card, access to 42,000 ATMs and an app that customers can use to deposit checks.
The company is positioning its new service, called Mobile Money, to "free people from excessive fees they often pay to use their own money."
"We've already transformed how Americans use and pay for phones, tablets and wireless service; why stop there?" John Legere, T-Mobile's president and CEO, said in a statement.
Like a traditional account?
"Millions of Americans pay outrageous fees to check cashers, payday lenders and other predatory businesses –- just for the right to use their own money," Legere added in the statement. "Mobile Money shifts the balance of power for T-Mobile customers and keeps more money in their pockets."
Customers who sign on to Mobile Money get a prepaid Visa card that can be reloaded through the Mobile Money app on their phones. Similar to a traditional checking account, customers would be able to directly deposit paychecks, deposit checks via their smartphones, make retail purchases, pay bills and withdraw cash from more than 42,000 in-network ATMs.
The company said there are no activation or overdraft fees and no minimum balances for its T-Mobile customers. It's working with Bancorp on the program.
"Mobile Money is a great option for the roughly 68 million U.S. adults who don't have traditional accounts and have to rely on alternative financial services," T-Mobile spokeswoman Robin Handaly said in an email. But she added that the company expects to see interest from other segments of its customers as well.
The company noted that it "isn't new to the personal finance arena," saying it has "facilitated billions of dollars in loans for customer phones, all without charging a penny in interest."
Pilot in South Florida
Handaly said T-Mobile recently did a pilot of the Mobile Money program in South Florida, and the pilot beat the company's expectations in the interest it got from customers and the amount of money loaded onto cards.
Other companies have similar products, so T-Mobile is not breaking the mold from a technology standpoint, said Jennifer Tescher, president and chief executive of the Center for Financial Services Innovation.
Tescher said T-Mobile's product is similar to Boost Mobile's Mobile Wallet that debuted last year. Others have likened T-Mobile's product to the Bluebird prepaid card from Wal-Mart and American Express.
Tescher said the move is smart for T-Mobile because it will help increase consumer loyalty and can utilize T-Mobile's established base of customers. She noted that customers using Mobile Money will likely go into T-Mobile stores more often to reload their cards.
"It's a matter of time before all mobile carriers are in this game," Tescher said. She said that, as "seemingly everyone is walking around with a mobile phone," it would make sense for phone and wireless providers to try to extend the usefulness of that product.
Tescher said how T-Mobile is marketing its product is notable.
"They are trying to make a big splash about it," she said, adding that it was interesting T-Mobile spun the product as a way to avoid predatory lenders rather than simply touting it as an added benefit to people's phones or as an extra convenience.
"T-Mobile really wrapped themselves in the flag of trying to save their customers money from predatory providers," Tescher said.
Are you ready to make your cellphone provider your banker as well?
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