T-Mobile: The Uncarrier for the Unbanked?
T-Mobile isn't intent on just shaking up the wireless industry; now it has its sights set on the banking industry as well.
The self-proclaimed 'uncarrier' unveiled a new Mobile Money service on Wednesday that it says will go nationwide after a trial in Miami that started in November. Unlike T-Mobile US Inc. 's Isis venture, Mobile Money is designed for those that don't have a bank account, letting them access their money and make payments via a T-Mobile-supported prepaid Visa debit card and a mobile app. They can use the app to take a picture of a check and load it on to the prepaid card, which they can then use for payments.
T-Mobile is going after the 8.2% of US households, or 17 million adults, that don't have a bank account, according to the latest FDIC data. Jan Dawson, chief analyst at Jackdaw Research, notes that the service is a good fit for T-Mobile's prepaid customer base, which is more likely to fit with this segment of the population than the big three carriers' contracted customers.
But, he notes, the challenge will be short-term revenue for T-Mobile as the service is free to its customers (though others will have to pay a fee). He said the service is another marketing effort from T-Mobile that will cost it money, at least until it tacks on other services to it.
Why this matters
T-Mobile has so far been shaking up the industry in its core tenets: service plans, devices, and data pricing. Now, it's trying its hand at service innovation, something operators haven't traditionally excelled at. According to Dawson, Mobile Money is the first sign that T-Mobile is interested in going beyond the traditional wireless services business.
"It fits nicely with T-Mobile's branding as a friend of the consumer and a company that does things differently, and the service should provide significant value to people who struggle to qualify for traditional bank accounts," Dawson writes in a research note.
Its announcement follows AT&T Inc. (NYSE: T)'s mCommerce play, announced last week to take on Square mobile payments. Both carriers are also involved in the Isis joint venture, which provides a full mobile payments and wallet service, but has struggled to find traction in the US. T-Mobile's focus on the unbanked may make this venture more successful. Services outside of the US that have addressed this population have been well received, but it's so far been an untapped demographic for US carriers. (See AT&T Offers a Square mCommerce Competitor.)
- T-Mobile to Pick Up 'Evil' Family Fees
- T-Mobile CTO: On the Road to Low-Band
- T-Mobile Spends $2.4B on Verizon Spectrum
— Sarah Reedy, Senior Editor, Light Reading