T-Mobile Wants to Be Your Bank, Launches Mobile Money Prepaid Debit Cards

T-Mobile is really taking its "Uncarrier" branding to the extreme with free banking services for subscribers.

T-  Mobile, mobile commerce

T-Mobile is really taking its "Uncarrier" branding to the extreme with free banking services for subscribers.

T-Mobile's "Mobile Money" service lets subscribers get a prepaid Visa card with no overdraft or maintenance fees. Customers can fill up the card by taking pictures of checks through a smartphone app, or by depositing cash at T-Mobile stores.

For withdrawals, cardholders can hit up 42,000 in-network ATMs with no fees. (Out of network ATMs cost $2 per withdrawal, plus any other fees from the ATM operator.) The service also offers free bill payments and free transactions to other cardholders. Lost or stolen cards can be replaced for free as well.

Because it's a prepaid card, there are a couple of caveats: For gas purchases, T-Mobile requires at least a $125 balance to pay at the pump instead of inside at the cashier. T-Mobile also suggests using caution for restaurant, hotel and rental car payments, as these business can put holds on a large percentage of funds.

Why is T-Mobile getting into banking?

T-Mobile's move into banking services isn't as strange as it may seem. A 2012 survey by the FDIC found that 28.3 percent of U.S. households were "unbanked" or "underbanked," meaning they had gone outside the mainstream banking system for services such as check cashing, money orders and payday loans. The survey found that a growing percentage of Americans don't have bank accounts at all, largely because they don't see the need or don't think they enough money to open one.

Meanwhile, as a 2012 Forbes points out , prepaid debit card use is growing among these unbanked and underbanked households. The problem is that prepaid cards can carry fees that are high or confusing. That's clearly what T-Mobile is trying to address, and the timing makes sense now that 90 percent of Americans own cell phones.

Of course, T-Mobile isn't being altruistic. If you tie up your money with T-Mobile, it's going to be much harder to switch to a competing wireless carrier. Although you don't need a T-Mobile account to use the prepaid card, non-subscribers get hit with fees for monthly maintenance (for accounts with less than $500), ATM balance inquiries, in-store cash deposits, international transactions and lost or stolen cards. In other words, if you aren't a T-Mobile subscriber, Mobile Money no longer frees you from the "excessive fees" that T-Mobile is decrying.

T-Mobile customers can order a card online now, and can get one at T-Mobile stores starting next month.

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