T-Mobile (NYSE:TMUS) announced a service Wednesday it says is aimed at the 68 million Americans without traditional banking accounts. Mobile Money is an alternative to traditional checking accounts that offers low or reduced fees to customers of T-Mobile's wireless service.
With Mobile Money, T-Mobile will sell a branded, prepaid Visa card that, combined with a smartphone app for iPhone (iOS) or Android smartphones, allows customers to pay bills, store and transfer money, and access a network of 42,000 ATMs. Fees are not levied to T-Mobile customers as long as they use an in-network ATM or reload the card at a T-Mobile store.
Mobile Money lets customers store money by making deposits at T-Mobile stores or online, cashing a check with a smartphone camera, and signing up for direct deposit. T-Mobile says the service is aimed at those who can't get approved for traditional checking accounts, and instead rely on payday lending or check-cashing services.
“Millions of Americans pay outrageous fees to check cashers, payday lenders and other predatory businesses – just for the right to use their own money,” T-Mobile CEO John Legere said in a press release. “Mobile Money shifts the balance of power for T-Mobile customers and keeps more money in their pockets.”
T-Mobile offers reduced fees for customers of its wireless service who sign up for Mobile Money and provide their cell number. But it will charge higher fees to non-customers, including a $5 monthly maintenance fee for cardholders who load less than $500 on the card every month.
The Mobile Money smartphone app can direct users to the nearest in-network ATM. However, T-Mobile customers using Mobile Money must pay $2 for the use of out-of-network ATMs, in addition to the fees levied by the machines themselves.
Mobile Money also offers bill payment and allows users to send and receive money to other T-Mobile card users from within the app for no charge, using the intended recipient’s phone number and the last four digits of their card. T-Mobile prepaid Visas can be purchased online or in-store.
Mike Sievert, T-Mobile’s marketing chief, says households using check cashers could save up to $1,500 a year by using the service. T-Mobile is partnering with Allpoint Network for ATM access, The Bancorp (NASDAQ:TBBK) internet bank, and the Blackhawk Network for Mobile Money.
Boost Mobile launched a similar Mobile Wallet service last year. T-Mobile is also a part of Isis, a joint venture with AT&T and Verizon Wireless to create a digital wallet service to make mobile payments using traditional checking, savings and credit accounts.
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