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T-Mobile(s tmus) is already becoming a major threat in the U.S. mobile industry with its cheap rates, lack of contracts and aggressive marketing. But the company now wants to take a big step beyond its comfort zone and become a bank.
T-Mobile launched a program called Mobile Money on Wednesday, which basically acts as a prepaid Visa(s v) debit card attached to a T-Mobile account. The financial institution in the background is actually Bancorp(s tccb), but T-Mobile is acting as the public face of the operation.
Customers can add money to their accounts at T-Mobile stores and Safeway locations or link their paychecks to direct deposit. They will be able to manage their accounts and pay bills from a smartphone app or the web. And they’ll be able to use a network of 42,000 ATMs.
Mobile Money is going after a big underserved segment of the American populace, known as the un-banked, and it’s not the first to do so. Last year, Sprint’s(s s) Boost Mobile brand launched a similar array of banking services called Mobile Wallet.
It’s a smart move. Though T-Mobile definitely has its fair share of high-roller customers, it’s cheap rates and flexible prepaid services have also made it a big destination for customers without access to traditional financial services. That makes the service different from Isis, the mobile payments consortium T-Mobile founded along with AT&T(s t) and Verizon Wireless(s vz)(s vod). While Isis seeks to get consumers to use their phones as a credit or debit card, Mobile Mobile is designed to give then access to such a card in the first place.