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T-Mobile Jumping Into the Check-Cashing Industry
An anonymous reader writes "T-Mobile has made headlines recently for trying to change the cellphone industry's reliance on contracts that lock customers into a particular carrier. Perhaps surprisingly, they've been fairly successful. Now, they're jumping into another industry plagued by high, customer-unfriendly fees: check cashing. 'Specifically, T-Mobile is hoping to offer an alternative for the 70 million or so U.S. adults that either have no bank account or have some bank services but still rely somewhat on check-cashing or payday-loan services.' How will they do it? 'Through the combination of a smartphone and a prepaid Visa debit card, T-Mobile (and its banking partner, Bancor) aims to offer many of the services typically offered through a bank, including check cashing, direct deposit and bill pay. The service, dubbed Mobile Money, allows customers to purchase and reload the card at more than 3,000 T-Mobile stores and, eventually, at Safeway and other retail stores. They can use the card anywhere Visa is accepted, and can also withdraw money, without a fee, at 42,000 ATMs across the country. Mobile Money customers can enroll in direct deposit for payroll, and personal checks and other types of checks can also be deposited by taking a picture of the check using the smartphone's camera.'"
maybe if all these middle men GTFO people would be better served than all these rent seekers wanting their free money
And what good is that?
In the US, most banks have free checking accounts. Why don't these people just use a bank?
Mod me down, my New Earth Global Warmingist friends!
T-Mobile are most definitely crooks.
Why can't we just use transactional cryptographic 3D QR-code like web-based systems that use the smartphone's camera and screen?
If the retailer and the customer both have an Internet connection (independent of each other preferred for security), why is NFC necessary?
Clearly T-Mobile will make some additional money by doing this. But bravo! Talk about an industry that preys on the most vulnerable. We have a local check cashing company that goes by the name 'RobCo'. No kidding (I guess the owners name is Rob). You couldn't find a more appropriate name.
Look at the economy. Where is it compared to years prior? Where is it going? The poor are increasing in numbers for a wide variety of reasons. They are *the* growing market. To not find a way to serve them would be ridiculous.
Lots of precedent for this, look at Bluebird from American Express, for example. Essentially the same services.
The European banking system (T-Mobile originates in Germany) is highly competitive. Checks basically don't exist anymore. You can still use them, but nobody wants to, because the alternatives are much more comfortable and reliable. I can only imagine that the people at T-Mobile are constantly thinking "WTF? Does nobody realize how unnecessarily complicated and expensive banking is in this country? Why isn't anybody doing something about it? Maybe we should do something about it."
Checks in the mail. Seriously, folks?
this would seem to suggest most t-mobile customers are what the industry commonly considers 'un-banked.' Day laborers, undocumented immigrants, and the working poor should they not already be allotted their salary as a credit card are being targeted for financial services through their mobile phone provider.
its a win for t-mobile who likely consider this a pittance for the ability to ensure a customer makes their payments in a timely manner, but shortsighted in that it is predicated on the notion that customers lack the convenience necessary to pay a bill. Wage stagnation, housing market collapse, rising unemployment and systemic poverty in America are all fundamental factors that check-cashing wont help. T-Mobile already offers a very affordable $50 plan with or without a credit check for their customers, which can genuinely help some low income customers. their pre-pay model IMHO will be far more appealing to a wider demographic than check cashing, for which an undeniable subset of customers are already beholden to.
Good people go to bed earlier.
In the UK I've not written or received one for about 2 years now and I expect I'm typical.
=) Yep. I went there.
1. They make it so easy to steal identities. A name and a matching social security number is all they ask, extend credit and are willing to eat their financial losses of identity theft. But the people whose identities are stolen have a long and arduous task of cleaning up their credit history. They make so difficult to freeze and lock my credit report to prevent identity theft by huge lobbying effort.
2. Merchants accepting point-of-sale pin protected ATM cards usually pay a very nominal 10 cent or 25 cents per transaction. The visa and mastercard monsters have muscled in, forced banks to tread debit cards (no risk of default to the credit cards) and credit cards (unsecured loans to card holders, significant risk of default) the same. Now merchants are forced to pay 1% to 2% of transaction as "fees".
3. The late fees, revolving charges, usury level interest rates ... Even medieval highway robbers and usurers did not have it so good for them.
4. The check cashing industry is also very active politically and stop any effort to clean up their act.
At some point some one will bribe/lobby somewhere and bring such check-cashing under the purview of banking regulations and demand T-mobile to be regulated as a bank if they offer these services and kill the project.
I just wish we could live in a democracy where our legislators look out for the interest of the common man and the future of the Republic.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
What happens when you decide a different company has better phone service but all your money is locked up in tmobile banking?
Well t-mobile knows their subscriber base which is mostly the poorer of the cell phone toting demographic. Might as well put in a liquor store and a payday loan store in their outlets as well.
In the UK I've not written or received one for about 2 years now and I expect I'm typical.
Yes, checks are still a thing in the U.S.A. Are you not allowed to have checks in the U.K.?
In the U.S. we still have a little bit of freedom. We can choose whichever payment system we want to use, rather than the one that is forced upon us. We can choose to pay by cash, by check, by debit card, by credit card, by cell phone, by pre-paid debit/credit card, by Pay Pal, by BitCoin(very limited), by Gift Card, electronic transfer(ACH), by wire, by predatory payment services(check cashers, Western Union...), and now by T-Mobile check cashing, as well as many more that I have probably never heard of.
In the U.S.A. it is entirely possible for the average citizen to never write a check. But, if we want to write a check, we can choose to do so and the recipient will gladly accept it. We call this ability to choose at will, "freedom".
...and count the number of banks vs. the number of stores selling prepaid wireless. If nothing else, THIS is the reason that T-Mo can get into check cashing and "just get a bank account" isn't a satisfactory answer.
Mobile banking is pretty common in Africa for the same reasons T-Mobile is highlighting. Low barrier to entry and with a couple of partnerships with existing brick and mortar shops to act as physical banks you have a bank that is easily more accessible than the traditional banks.
References
EcoCash Zimbabwe
M-Pesa - Wikipedia
Great service. It sounds suspiciously like a bank account... so their big breakthrough is you get a checking account with no checks?
Get a web developer
One reason people use check cashing services, even if they have a bank account, is because it can often be easier to get to and utilize a check cashier than to bring a paper check to your local (if one exists) bank. Why resort to a paper paycheck, when direct deposit is offered by most employers? In part because setting up direct deposit is a pain in the ass: fill out a paper form, search around for routing and account numbers. The payroll department then transcribes those numbers into its payroll system, which forwards them to the payroll processor, who sets up the ACH transaction, all of which might take more than one pay period to clear. Some banks or processors will send trial ACH transactions, whose values must be confirmed, before the account is verified for deposit.
Couldn't all of this be taken care of with a single, one-time, QR code, generated on-demand by you (or, actually, by you bank's online or mobile access application) and given directly to HR, who then simply passes it on to the payroll processor?
People are different and it's interesting. Why does a person choose a particular cell phone provider?
I look at things like cost,
I recently polled a group of university students as to why they chose their provider/plan and I was genuinely surprised at their decision factors. The most overriding reasons were:
It is tough to see when one is a privileged rich kid.
I've never been a "privileged rich kid" but even the poorest slackers I've known still had a credit card and/or checking account.
I think you're mistaken.
It's pretty bad when these people have slipped so far under you don't even see them.
It's a cool idea, and I like what they offer in theory. In practice however, i have found their service to be spotty at best especially where I live. Everyone I know that has switched to t-mobile has complained about poor reception, call quality, and support. As much as I would love to get off of Verizon, I cant justify paying for a phone that doesn't work.
Somewhere, something incredible is waiting to be known. -Carl Sagan
for several reasons. I'm old school in my thinking and this violates the tenet of doing one thing well. Why are so many companies straying into areas they have no real expertise in and hoping this will work? It rarely works. This is akin to me calling round Strada Pizza and expecting them to make a proper curry or a decent Shepherd's Pie. Not happening.
1. Eliminate KYC/AML (not going to happen as the ruling elites don't want freedom fighters and other adversaries to utilize the banking system for their cause)
2. Or, just use bitcoins. (T-mobile is far capable of operating a wallet and exchange service)
New Economic Perspectives
For up to five years. Not the first time you bounce a check. But do it a half dozen times and no bank will take you for up to five years no matter how much money you have.
The first thing that comes to mind is illegal immigrants. Some other people on this thread have mentioned criminal records. Then there's welfare. You start to lose benefits if you have too much money in the bank. It's a pathetic amount like $2000. There's no way you can dig yourself out of the welfare trap with $2000 if you lose your $500/mo EBT because of that. So. Cash the check, buy some bling. That's your real savings. The poor who do this are acting as perfectly rational economic actors. If you want to at least partially kill this industry, don't start using assets as a test for benefits until they have enough savings to last them 2 years on their own, and then taper the benefits instead of ending them all at once. In fact, the benefits need to be constructed in such a way that obtaining a job or getting a raise doesn't result in a reduction to net income. That would go a long way towards getting people off welfare programs.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
trillions of dollars that are accounted for and well known are ignored and left untaxed in shelters. They aren't going to go after the $30 you made in tips last night
It is just made easier to use, load, and track. Tied to your phone, it makes things like picture-deposit and balance tracking possible, or just easier, than your WalMart pre-paid Visa.
it's not that hard a concept.
Through the ups and downs of economic cycles. Then around 1980 personal CDs and money market accounts came along with much higher interest rates, typically related tot he Fed short-term rate. Then most banks switched to these rates, which have been about zero for the past six years.
The first CDs and money markets had high minimum balances, about $50K in 2010 inflated money. It took me years to save up enough for my first in the 1980s. Plus they had large early cash-in penalties- typically a half-years interest. You could write that off of taxes however.
I think it was the computerization of banks that allowed interest rate flexibility. before then your passbook was the main record - you dare not lose it. It was more up to date than the bank records.
Its sort of created a an economic revolution in some poor African countries which hand minimal communications and banking before cellphones. Now a small businessman, e.g. farmer or sewing-women, can accumulate the profits of previous labor and use it to finance future endevors without scrouncing for loans. It was also hard to accumulate currency around the family-hut, assuming you had any. Beacuse petty theft and small emergencies consumed it quickly. Cell-banking has spread to Asia and now the Americas.
Seriously, if you are so far above the line that this occurs at that no one you know falls below it, you are a hell of a lot better off than you think.
The problem with middle class is for some reason they seem to think that is what poor is, and cannot conceive of someone worse of than them.
I started off poor. I grew up moving from eviction to eviction. bank accounts were simply not an option for my mother, she had floated checks to try and stave off evictions. We went hungry often. A night with no food, or maybe a package of crackers to share, was common- at least once a week, and often more.
The road up from there is steep, and many do not make the climb. College was not an option- too poor to afford it, not poor or minority enough to get scholarships. Grants that were available would not cut it- and the aforementioned poverty and evictions meant no student loans for us. Constant moving meant a school history that does not bring the scholarships flocking. Sports? Who has time to excel at sports when finding supper is the priority? The military was my only hope, and even that was iffy - could I get a training that will translate to decent civilian jobs? (spoiler- I did.)
I am middle class now- upper middle to be honest-, but that was a very gradual climb taking over 20 years.
But I do recognize how far I have climbed and DO understand the people still struggling at the bottom are not there because they are lazy bums.
A bank account requires a credit check and a checking history check. bounced some checks last year? no account for you.
Going state mandated cashless may cause a recession in the united states!
Which led to rise of the TEA PARTY!
I wish Safeway has thought of this. A grocery store would be a place people without bank accounts would already come on regular basis, and they already have a secure way of handling cash. Either physical or online crime against a company that has no experience handling it is not going to be pretty.
Git Chav british!
Zero paper means zero way of stopping manipulation of your personal ones and zeros - most especially by your government that has proven rules mean jack shit if you're on their list. A push of a button, aaaaand you're penniless (thus homeless) with no way of proving you've been fucked by those that control the databases. Mission Accomplished!
You have to have $50 to do that. The poor don't have that much at a time, and when they do, can't afford to leave it as the minimum deposit in the savings account.
How about getting the fuck out of whatever shithole you live in, then? Getting a banking account and debit card anywhere in the SANE parts of America is as simple as walking into a bank a $100 cash or check, signing a few forms, then walking out.