Telecoms giant T-Mobile is taking on the American banks, teaming up with BankMobile to launch an app-based checking account.
Following a soft launch late last year, the no-fee, interest-earning, mobile-first T-Mobile Money account is now available nationwide. The account has Fdic-insured protection thanks to a partnership with BankMobile, the digital-only arm of Customers Bank.
The launch comes just two years after T-Mobile shut down its previous effort to shake up with US banking market with a similar product aimed at the underbanked.
Despite that false start, T-Mobile is convinced that there is an opportunity to disrupt the industry, citing the fact that seven out of 10 Americans now bank digitally but just 13% of traditional providers believe their core systems can keep up with the pace of innovation.
Customers get a Mastercard debit card, money management tools, mobile cheque deposits, P2P transfers and the ability to pay with Apple Pay, Google Pay and Samsung Pay.
However, the firm is not just relying on a slick user experience to win people over, it is also offering eligible Un-carrier customers four per cent Annual Percentage Yield on balances up to $3000 - 50 times higher than the average US checking account.
John Legere, CEO, T-Mobile, says: "Traditional banks aren’t mobile-first, and they’re definitely not customer-first. As more and more people use their smartphones to manage money, we saw an opportunity to address another customer pain point. You work hard for your money, you should keep it, and with T-Mobile Money, you can!"