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T-Mobile bets on mobile banking to further boost subscriber gains

The introduction of banking services by T-Mobile could be a significant step forward for mobile wallets if the wireless carrier is successful.

Mobile Money by T-Mobile continues a focus on introducing services meant to position the carrier as more consumer-friendly than competitors such as AT&T and Verizon. The program combines a money management application with a reloadable T-Mobile Visa prepaid card to offer customers low- or zero-cost banking services.

?What?s interesting about T-Mobile?s Mobile Money program is the targeting of a segment which is typically associated with either a lack of trust or a lack of positive credit ? both of which are hard to overcome,? said Lara Albert, vice president of global marketing at Globys, Seattle, WA.

?Although other players and MVNOs have attempted a similar approach, they were lacking one of T-Mobile?s strongest assets - a base of more than 45 million subscribers,? she said.

?If T-Mobile can get all of the stars to align ? right customers, right service, right usage, right profits ? this could be a major advancement on the mobile wallet front and open additional doors in the financial services space for T-Mobile.?

The Unbanked
Mobile Money is targeted at the small percentage of American consumers who currently do not have a bank account because they do not want to pay fees or are not eligible for one.

Registered T-Mobile wireless customers can take advantage of the program and receive no-cost in-network ATM withdrawals with no minimum balance requirement. Customers can also deposit paychecks directly into their accounts, take advantage of mobile deposit, make purchases and pay bills.

Because the program includes a mobile app, customers can manage their money at any time and any place. Users can also sign up to receive text or email alerts on their card activity.

Wireless carrier Boost launched a very similar service in May 2013.

Prepaid debit cards tied to a mobile app are also available from financial institutions and other companies such as Green Dot.

Google has also introduced a physical prepaid card to complement its mobile payments solution Google Wallet.

?This announcement is more significant for T-Mobile than it is for mobile banking,? said Drew Sievers, co-founder/CEO of mFoundry, Larkspur, CA . ?Mobilizing a prepaid card isn't new for thousands of banks and prepaid providers, but it is new for T-Mobile.

?Not surprisingly, this is a plastic card, not a mobile payment mechanism,? he said.

?T-Mobile will face the same challenges faced by every company offering prepaid cards. How do you attract customers, and how do you get them to reload? It's a very competitive market."

Brand makeover
The Mobile Money program is the latest example of how T-Mobile is attempting a makeover with a strategy called Uncarrier that positions it as the more consumer-friendly carrier compared to competitors such as AT&T and Verizon. It follows other moves such as giving customers the option of financing their smartphone purchase.

To support its Uncarrier strategy, T-Mobile is also offering free international data roaming and a new upgrade program as well as giving tablet customers 200MB of free data.

These moves have been meeting with some success. with T-Mobile adding 4.4 million new subscribers in 2013.

If T-Mobile is able to sign up enough users for Mobile Money, it could use this as a stepping off point to further drive revenue.

?Although this appears to be a differentiation play at first glance, it?s safe to assume that T-Mobile has a strategy for turning this into a profit-generating service,? Globys? Ms. Albert said.

?Once trust is established, or reestablished in some cases, users will be more accepting of the transaction fees for ancillary services, such as money transfers and bill pay, but will still require a ?push? to alter their status quo behaviors,? she said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York