T-Mobile likes to say that it is redefining the world of mobile operators with its “non-promising” initiatives. And its latest announcement, Wednesday, adds a new angle to the definition of “mobile banking”: the company is now embarking on check cashing.
The service, called Mobile Money, is scheduled to launch in February and will be available at participating T-Mobile outlets and Safeway stores across the country, the company said. The great promise of T-Mobile is that the service will allow users to cash their checks without the “excessive fees” demanded by traditional check cashing companies.
Customers don’t need to be T-Mobile wireless subscribers to subscribe to Mobile Money – or vice versa – but being both has its benefits. The business will automatically waive monthly charges for its wireless customers.
“Millions of Americans pay outrageous fees to check cashiers, payday lenders and other predatory businesses – just for the right to use their own money,” T-Mobile chief executive John Legere said , in a press release. “Mobile Money changes the balance of power for T-Mobile customers and keeps more money in their pockets.”
So how will this work? T-Mobile customers will receive a T-Mobile Prepaid Visa card that can be loaded and reloaded through the Mobile Money app. The company did not give details, but said it would offer the services at “a reduced fee or $ 0” for its registered wireless customers. The service will not require any minimum balance and also does not promise any overdraft fees. On an information page, T-Mobile said there would be charges for “non-typical use,” such as sending cards overnight, using an off-grid ATM, and charging urgent requests for checks to be cashed.
From their Mobile Money accounts, users will be able to deposit paychecks directly, deposit checks through a smartphone camera, make purchases, pay bills and withdraw money from 42,000 ATMs in across the country, T-Mobile said.
The service looks like a program Walmart and American Express began offering the Bluebird in 2012, which offers users a prepaid card aimed at “unbanked” or “under-banked” segments of the population who do not have traditional bank accounts. Like Danielle Douglas of the Washington Post Reported, banks are bracing for the possibility of the federal government starting to impose new rules on these consumer products, including prepaid cards.
But T-Mobile seems eager to step into space. “Mobile Money builds on T-Mobile’s funding experience to provide a reasonable and affordable alternative to verification fees for the approximately 68 million American adults who do not have traditional accounts and must rely on alternative financial services, ”the company said in a statement.
This move makes some sense, given that T-Mobile has aggressively attacked the lower end of the smartphone and prepaid market – moves that make them especially popular with younger customers and urban dwellers. These demographics match up fairly well with those of the FDIC profile of unbanked Americans of a 2012 report.
Those interested can register at service starting Wednesday, T-Mobile said.