T-Mobile is bidding to shake up the US banking market with a new service which offers current account-style features to the country's millions of underbanked.
It is interesting that Visa keeps beating the other networks to the punch on these debit deals. If the other networks want to break through they need to start to win some of these big ones with emerging companies.
Great idea targeting a huge opportunity. But, stupid to pit the new program against check cashers when hundreds of thousands of disillusioned depositors are leaving the banking industry every year. Many of these consumers are already adopting prepaid cards
with mobile functionality and using check cashers for convenient, face-to-face service. -- Jim Wells
Great idea. Telcos in developing & developed countries may adopt this idea to generate more revenues & profits, since there is market saturation and margin pressure in their core business. Also unbanked population is considerably high in these countries.
Any innovative & cost effective banking solution will help the underprivileged people to get banking services.
That is a new way for mobile networks to start making money! Great idea.
How is this any different from NetSpend, GreenDot, ...? In fact, by waiving fees for almost all activities, T-Mobile might shake up the prepaid card market dominated by NetSpend and GreenDot, which itself set out to shake up the check cashing market.
Reading this story, I wonder if T-Mobile has missed a trick. It is widely accepted that consumers need more than just a new facility if they are to ‘go mobile’ with their financial behaviour and the provision of value added services (VAS) are commonly cited
as the bonus that can trigger the change. Had T-Mobile taken the step to link their customers' accounts to a rewards or incentives programme that would generate cash back and receive discounts at popular stores, as some of the best e-money providers do, its
offer to this demographic would be enhanced greatly. Waiving the fees is a good move but in the absence of additional incentives, it will be interesting to see how many people adopt the solution. Having invested the time, energy and money to bring this product
to market, one wonders why they didn't go the extra mile.
Read more in my Finextra blog post: http://www.finextra.com/blogs/fullblog.aspx?blogid=8855
There's this view that T-Mobile doesn't need to differentiate its core product offering and can still gain traction based on GTM differentiatiors like "45M existing customers, 70K stores and big mktg $$.".
© Finextra Research 2014