T-Mobile, the US carrier which has been making the headlines for its “Uncarrier” business model — including offering to pay for a customer’s early termination fees when switching from competing carriers AT&T, Sprint and Verizon — is now taking another bold step: it’s moving into personal banking.
Today, T-Mobile took the wraps off ‘Mobile Money’ as it extends its “Uncarrier” consumer movement to personal finance.
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‘Mobile Money’ is made up of a smartphone money management app that is designed for use with a reloadable T-Mobile Visa Prepaid card.
T-Mobile is touting zero cost or reduced fee services for registered wireless customers via Mobile Money — which means “no charges for activation, monthly maintenance, in-network ATM withdrawals, overdraft, or for replacing lost or stolen cards.”
Mobile Money also lets customers get the benefits of traditional checking accounts, which include direct depositing paychecks, depositing checks from smartphone cameras, making retail purchases, paying bills and withdrawing cash from more than 42,000 in-network ATMs nationwide with no ATM fees.
This means that essentially, T-Mobile is taking the role of a bank to provide its registered customers with a free checking account, as it is out to let US consumers manage their money using just their smartphones.
CEO John Legere says: “Millions of Americans pay outrageous fees to check cashers, payday lenders and other predatory businesses – just for the right to use their own money. Mobile Money shifts the balance of power for T-Mobile customers and keeps more money in their pockets.” The company cites Bankrate’s 2013 Checking Survey as saying that ATM, overdraft and monthly maintenance fees hit record highs last year.
Consumers can register for a personalized T-Mobile Visa Prepaid Card starting today. If T-Mobile’s initiative takes off, it will no doubt pose a threat to traditional banking practices (though the threat would be limited only to checking accounts), but such a change will definitely take time — and it will be interesting to see how many of T-Mobile’s customers actually sign on for the service in the near term, or how many new customers switch to T-Mobile just because of this service.