T-Mobile Wants to Compete with Banks with New Smartphone App

T-Mobile has taken a step forward towards the next phase of its consumer revolution Mobile Money.

The telecommunications company's next business venture will combine a simple, smartphone money management applications designed for use with a re-loadable T-Mobile Visa Pre-paid Card. The card will offer several discounted prices or zero-cost services with registered T-Mobile wireless customers.

According to Bankrate's 2013 Checking Survey, account overdraft fees and monthly maintenance fees reached the highest amount noted ever in the previous year.

With Mobile Money, customers need not to pay for those. Registered T-Mobile wireless subscribers will not be charged for account activation, in-network ATM withdrawals, monthly maintenance, and even when replacing a lost or stolen card. It also does not require maintaining balances, so customers no need to worry about over draft fees.

T-Mobile CEO John Legere said in a news release, "We've already transformed how Americans use and pay for phones, tablets and wireless service; why stop there? Millions of Americans pay outrageous fees to check cashers, payday lenders and other predatory businesses -- just for the right to use their own money. Mobile Money shifts the balance of power for T-Mobile customers and keeps more money in their pockets."

Also, customers can do everything they do with their traditional checking accounts like paying bills, making purchases, withdrawing cash from more than 42,000 in-network ATMs nationwide with no ATM fees, direct depositing paychecks and depositing checks from capable smartphone cameras.

Mobile Money can also be a powerful tool for families seeking a better way to budget or to provide money to kids away at college.

"It's ridiculous that families, especially those who can least afford it, have to pay so much for basic check cashing services that many of us take for granted," said T-Mobile CMO Mike Sievert.

"Mobile Money levels the playing field to put money back in consumers' pockets for important things -- like bills, groceries or vacations. The typical household using a check casher to cash their paychecks could save about $1,500 per year, and customers tired of getting hit with overdraft fees can switch and save an average of $225 a year," he added.