In a sign that at least some U.S. wireless carriers haven’t given up on their ambitions in mobile payments, T-Mobile US Inc. on Thursday launched its T-Mobile Money service nationwide. But the service, which began as a pilot in November, goes beyond payments offerings to include some traditional banking services as well.
Working with technology from the BankMobile unit of Phoenixville, Pa.-based Customers Bancorp, T-Mobile’s app includes no-fee access to an interest-bearing checking account as well as bill payment, peer-to-peer transfers, check writing, and all three major third-party wallets—Apple Pay, Google Pay, and Samsung Pay. It also features a Mastercard debit card.
Bellevue, Wash.-based T-Mobile, a unit of Germany’s Deutsche Telekom that likes to bill itself as the “Uncarrier,” has clearly aimed the new mobile service squarely at traditional fee-bearing bank accounts. The checking account, for example offers a 4% average percentage yield on balances up to $3,000. Citing research from banking-data service Bankrate, the carrier claims this yield is 50 times more than the rate on the average U.S. account. Any money exceeding $3,000 earns 1%.
With the debit card, users can also access more than 55,000 ATMs globally in the Allpoint network, T-Mobile says. Allpoint is a unit of ATM deployer Cardtronics plc.
The company says it launched T-Mobile Money because it sensed some major weaknesses in traditional bank offerings that go beyond fees and interest rates. It argues that smart phones constitute the fastest-growing digital platform, citing a consumer survey from consulting service PwC. But less than half of banks say they have formed a digital strategy, T-Mobile says in its announcement, while just 13% say their core systems “can keep up with digital innovation.” Sources for these figures are researchers the Boston Consulting Group and The Financial Brand, respectively, according to T-Mobile.
“Traditional banks aren’t mobile-first, and they’re definitely not customer-first,” said John Legere, chief executive of T-Mobile, in a statement. “As more and more people use their smart phones to manage money, we saw an opportunity to address another customer pain point.”
The app works on the Android 5.1 operating system or later and, for Apple devices, on iOS 10.3 or later. It’s also open to any customer, including those who don’t use T-Mobile as their carrier.
This isn’t T-Mobile’s first foray into mobile payments and financial services. Along with rival carriers AT&T Inc. and Verizon Wireless, the company in 2010 launched a mobile wallet called Softcard that later competed briefly with Apple Pay and similar offerings. Early in 2015, the telecom companies shut down the service and transferred the technology behind it to Alphabet Inc., owner of Google Pay.
In March, T-Mobile announced it would offer merchant services with its GoPoint program, which includes payment-card processing services and mobile card readers. T-Mobile and rival Sprint Corp. announced plans a year ago to merge, but the controversial deal still hasn’t been consummated.