T-Mobile is continuing its efforts to disconcert rivals with its new Mobile Money plan.
No. 4 T-Mobile, which already has gotten rid of contracts and added early upgrade programs, now is tackling mobile banking for subscribers who don't have bank accounts. Mobile Money lets users pay bills over a mobile device and/or with a Visa-backed T-Mobile debit card. This strategy targets people who don't bank at all, not just subscribers who use mobile wallet apps.
As Yankee Group analyst Rich Karpinski notes, T-Mobile isn't the first operator or provider to try this. Boost Mobile has done it, as has Wal-Mart, among others.
"But given its strong 'uncarrier' strategy, T-Mobile brings some solid advantages, along with a portion of its customer base (including MetroPCS prepaid customers), that are a perfect fit for an aggressive mobile money service," Karpinski said. "T-Mobile is also being aggressive in trying to check off as many customer complaints as possible. In this case, many typical fees have been eliminated – a big draw for customers whose credit profiles have typically forced them to pay steep fees for the 'privilege' of accessing mobile banking services."
Karpinski expects T-Mobile to make money from the partner side of things, as well as charge customers for some services. Most importantly, however, Mobile Money "has the potential to be a huge churn-reducer."
"With increasingly large numbers of customers in the U.S. no longer bound by mobile service contracts, operators must deliver valuable services that are also sticky," Karpinski said. "It may be becoming easier to switch phone providers, but leaving behind a slew of banking, credit and financial service arrangements may be a much trickier proposition."
T-Mobile introduced Mobile Money as Sprint is said to be readying to bid for Deutsche Telekom-owned T-Mobile.