The Uncarrier wants to be the Unbank of prepaid debit cards
T-Mobile has been playing "bank" for some time now with its 24-month financing of devices, and now it wants to expand that reach to purchases and customers of all kinds. "Mobile Money" is a new initiative from T-Mobile to help with the struggles of banking in the U.S. faced by an estimated 68 million people who don't use "traditional" bank accounts.
Mobile Money isn't much different than other prepaid debit card programs — you simply load money onto the card through a variety of sources, and use the card anywhere VISA is accepted. You can make purchases, withdraw from ATMs, cash checks, setup direct deposit into the account and use it as if it were a bank-issued debit card.
Where the "Uncarrier" (er, Unbank?) vision of T-Mobile comes in here is that this is a smartphone- and T-Mobile-focused service. You'll be able to manage your account, cash checks and find ATMs through an Android app linked to your account, deposit money at T-Mobile stores with no fee and benefit from lower fee structures if you're a T-Mobile wireless customer.
Just like other prepaid debit cards there will be fees, however. T-Mobile shows off the fact that there will be no fees for many things if you're a wireless customer, but you'll still pay for card reloads under $300, pay $2 for "out of network" ATM transactions, pay to expedite mobile check deposits and generally be nickel-and-dimed for many transactions. T-Mobile likely isn't false when it says its fees a lower, but be cautious in thinking this is a "free" service.
If this seems like an odd arena for T-Mobile to step into when it clearly has important things on the wireless side to tend to, you're not alone. From the standpoint of building brand recognition with folks who are cost-sensitive, this certainly makes sense, and we're sure a good number of people will actually take advantage of this. But how much does this distract away from T-Mobile's objectives as a carrier? Only time can tell how this one will play out.