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.'"

Comments

Why do these exist

[binarylarry]

In the US, most banks have free checking accounts. Why don't these people just use a bank?

Re:Why do these exist

[Lodlaiden]

Some people have done soo many bad things that they can't get a pay for banking account.

The alternative to that is they don't want their money laying about where certain govt. agencies can remove it and deposit it elsewhere, such as the ex-wife's bank account.

Re:Why do these exist

[amiga3D]

This isn't the answer to that. You can bet it will be a simple matter for them to grab money from this system as well. Cash is still the best bet if you're shady. Until they do away with cash then it'll be a barter system.

Re:Why do these exist

[jeauxkewl]

Most banks have gotten to the point that they only offer free checking if you use direct deposit. If you deal mostly in cash or work for a small company that cuts paper payroll checks, you're not left with a lot of free options.

Re:Why do these exist

[LF11]

There are a huge humber of people in the US who are simply unable to get a bank account. As far as the banking system is concerned, they do not exist. Ever see the movie, Elysium? It's like that.

It is tough to see when one is a privileged rich kid. I only learned about it when I picked up an interest in bitcoin and heard someone speak about what it meant for the poor to be able to hold wealth without a bank account and without having to carry cash.

Re:Why do these exist

[Anonymous Coward]

Check cashing is there for undocumented people (who can't provide the basic information to get an account, but are occasionally paid by check). I actually used to work for a bank (one of the larger US ones) that owned a Check Cashing business and they used to send someone out to the day laborer sites on paydays to facilitate the process.

It's about as predatory of a practice as you can get and even the company that owned these check cashing locations knew that it was scuzzy. I remember getting a vibe when working with the head of the check cashing organization that he'd been breaking legs in a former profession.

Maybe T-Mobile can do this right, but it's an industry built on taking advantage of the fact that someone can't use a free service. I don't see how it could be possible to do it right.

Re:Why do these exist

[Anonymous Coward]

A debit card is a good option... *IF* you have or can get a bank account.

In my younger days, I bounced some checks. Learning experience about how to keep track of money. End result was a closed bank account and an inability to open a bank account practically anywhere else. Sort of black-listed via whatever tracking system they have/had.

I learned, fixed those issues and have only had minor issues since... but the fact remains that it's not impossible, or even hard, to find it difficult opening a bank account.

Re:Why do these exist

[Grishnakh]

In the US, most banks have free checking accounts

Citation needed.

I haven't seen a free checking account in ages. Some of them can be free, if you meet certain qualifications, but I seriously doubt there's any truly free ones out there any more. At the very least, they usually have a minimum balance requirement; at my bank, it's $100 for their lowest-level checking account. If you drop below that at any point, they sock you with fees. Poor people can't handle an account like that because they won't be able to keep up the minimum balance; at some point, they'll need the money NOW and their balance will drop, and that $8 fee will really hurt them. That's why they're called "poor": they can't afford an $8 service fee every month because some multibillion dollar bank wants fees on top of the interest they get for holding peoples' money.

It wasn't always like this. Back in the 80s (a much better time than now, in most respects), bank accounts were usually free, had good interest rates, and there were no fees for almost anything. Even though ATMs were brand-new technology, they were really reliable (no BSODs then), AND you could use other banks' ATMs, without a fee!

Re:Why do these exist

[DNS-and-BIND]

How hard is it, exactly, to walk in to a credit union and walk out with a checkbook?

Re:Why do these exist

[LoRdTAW]

People who are charged with various money related crimes are banned from banking. A coworker I worked with was a drug dealer and was picked up on tax evasion and did 2 years in the can. He can't have a bank account. Another guy I knew through a friend was caught embezzling $35,000 from his place of work. He did not serve time but had to pay it all back using money borrowed from his parents. He also can't have a bank account for at least another 5 or 6 years (something like a 15 year ban).

I am sure there are plenty of deadbeat dads avoiding bank accounts to hide money from their baby's momma. That or they work off the book. I knew a guy who fathered two kids and skipped out on the girl. He worked as a handyman and accepted cash and checks and never had a bank account. The girl finally took him to court and he lost his drivers license so he had to start paying. Last I heard he knocked up yet another girl in florida and is now living with her to avoid hiding money from yet another girl.

For others it boils down to they have so little money its almost pointless to have a bank account. They live hand to mouth cashing their check and paying off bills like rent and then buying food. When you make $10-12 an hour little is left after bills and food so why bother with a bank account? A coworker the other day said she had $1.35 in her bank account. I can't remember when I had less than a $1000, but then again I save and spend as little as possible. And I am no where near rich or wealthy either.

Re:Why do these exist

[RabidReindeer]

How hard is it, exactly, to walk in to a credit union and walk out with a checkbook?

Remarkably hard, sometimes. I know someone with a steady employment record, good bill-paying history. Couldn't get a credit union account. Not enough debt.

Re:Why do these exist

[xorsyst]

Still like that in the UK, apart from the interest rates. In fact it's got better here since the 80s. But you do need solid ID to get a bank account for some reason.

Re:Why do these exist

[Anonymous Coward]

Since it would seem that most /. folks are unaware, allow me to explain exactly why many folks don't have bank accounts -- it's simply that due to onerous fees, if/once someone makes a mistake, their existing bank piles on miles of crap fees until such time as the account, through little to no direct action of the customer, ends up irreparably into a negative balance; one of my own employees went negative by about $20, and within 3 months, through no further action by him, he was told his account was something like -($200.00). While this might be a simple problem in a pure competitive capitalistic system, aka GO TO A COMPETING BANK AND SAY THE HELL WITH THE BOGUS FEES, nowadays the banks prevent this by sharing the information -- so if you screw up at one bank you are truly blacklisted at ALL OF THEM, regardless of the legitimacy of the original infraction. Anymore, my understanding is that ALL BANKS are tied into this database, and it's private, and not regulated like the credit reporting system.

For more reading enjoyment, I found this:
http://dealbook.nytimes.com/2013/07/30/over-a-million-are-denied-bank-accounts-for-past-errors/?_php=true&_type=blogs&_r=0

Re:Why do these exist

[Bacon Bits]

But if you don't have a bank, how can you establish a banking record? Once you get to a certain age, it becomes a Catch-22. Can't bank because don't have credit record. Don't have credit record because can't use bank.

This is why my parents got me a low maximum credit card (~$500) when I was a teenager. Just to establish a credit record so I wouldn't have trouble getting a bank loan in the future.

Re:Why do these exist

[operagost]

Let them eat cake?

Re:Why do these exist

[the eric conspiracy]

Most community banks and credit unions have true free checking accounts.

http://www.nerdwallet.com/blog...

Commercial banks, not so much.

The problem is at least as much with bank location as it is the availability of free checking.

To paraphrase Willie Sutton, banks go where the money is.

Re:Why do these exist

[operagost]

Guess what? Those are pretty much impossible to get, due to Dodd-Frank. Dodd-Frank commits age discrimination, by prohibiting legal adults from obtaining credit cards unless they meet income requirements that are impossible to obtain for most young people, especially students.

Now you know who to thank when our society is a race of paupers: a guy who got a sweetheart deal on a loan from Countrywide in exchange for ignoring their fraudulent bookkeeping, and a guy who claimed the Republicans were responsible for the housing bubble bursting while he was the one opposing Fannie/Freddie reforms in the mid 2000s.

Re:Why do these exist

[Cro Magnon]

I never had a "free" account, but I remember when we had good interest rates. My first CD, in the mid to late 80s, paid 8%, and IIRC, my regular savings was 2-3%. Even my checking gave me 1%. Nowdays, most long-term CDs aren't even 1%. :(

Re:Why do these exist

[torkus]

Check out some credit unions. I think mine required a $5 buy-in/minimum deposit or something silly like that. The only fee I've ever paid (10+ years) was for my mortgage application. The catch is they don't have 3 branches in every single town throughout the US...which doesn't matter if you're poor and don't travel or rarely need a teller (like me).

The banking industry of the 80's was a mess. The prime rate hit the highest ever of 21.5% and averaged around 15% for the decade (currently 3.25% for reference). It's no wonder they could pay a few % interest on accounts and still make plenty of money of loans without fees. Even at the lowest, the prime rate was 3x what it is today. Plus the deregulation of banking led to all kinds of nasty things. Most people forget how many banks failed in the early 80's and how many new ones popped up. The FDIC spent a ton of money (especially for the time) refunding deposits from failed banks.

Personally I'd rather a $8 fee than a 15% prime rate. Granted the poor are still taken advantage of and also wind up paying much higher interest rates...but that's a more complex socioeconomic issue. It's not just greedy banks.

A different issue though - the amount of background checking a bank does to open a simple check account. I declined and walked out a few years back when I realized what they were asking of me and asking me to sign - especially when they refused to let me have a copy of some of the paperwork I was told I had to sign.

Re:Why do these exist

[hendrips]

Checking accounts are not cheap for a bank to run. I know something about this because I am a member of a credit union, and, being a finance nerd, looked through their books. It is pretty likely that even at $8 per month in fees, a bank would actually be subsidizing a depositor if they didn't also have an account besides checking. The reason that banks were willing to offer large subsidies for checking, ATM use, etc. in the 80's was because it was easier to create lock-in. If you had a checking account and ATM card at a bank, you were pretty likely to also get a savings account, CD, and mortgage from the same bank - you might even be interested in insurance or brokerage services. Banks were willing to swallow the non-trivial costs of offering free checking because they were, essentially, marketing expenses. Also, it should be mentioned that it wasn't quite as expensive before 9-11, since "Know-your-customer" and other anti-terrorism measures didn't exist. Now, it's much easier for customers to comparison shop, especially for CD rates and insurance prices, so it's not as viable for banks to rely on cross-selling.

Re:Why do these exist

[beltsbear]

Banks either won't let them or have made it near impossible for some. Those people have been abandoned by the banking industry.

If you have a negative balance at a bank like Bank of America they PILE on the fees. Instead of one bounce fee they go high to low to get the most number possible. Then they charge for each day negative. If you do not fix it soon you could owe hundreds or even thousands in fees. They then keep this on file and here is the problem... They share it with other banks and REQUIRE it all be paid back before you can open a new account almost anywhere.

So if you feel morally wronged by a bank charging unfair fees and refuse to pay, you exist outside of the banking system.

Re:Why do these exist

[PeeAitchPee]

had good interest rates

This is because historic interest rates were insane at the time -- the highest they've ever been. When you bought a house, your mortgage rate was about the same as the one you have when you run a balance on a credit card today. Can you imagine buying a house with your credit card, and running that balance for decades? That's what it was like -- so be careful what you wish for when pining for the 80s, especially regarding interest rates.

Re:Why do these exist

[pesho]

But if you don't have a bank, how can you establish a banking record? Once you get to a certain age, it becomes a Catch-22. Can't bank because don't have credit record. Don't have credit record because can't use bank.

You show up in the bank with some money and tell them that you want to make a deposit. Couple of hundred bucks would do it. Banks love money. If on the other hand you show up with no money and ask for a credit, well than this is a different story. Did I say that banks love money?

Re: Why do these exist

[amiga3D]

You can't read genius. I am talking about people hiding money. You can't hide money in the system. That is why eventually the government will do away with cash, they know there are billions of dollars floating around that they aren't getting their cut on. Lot's of people work cash jobs just to avoid this situation. When cash is gone it'll be barter for them.

Re:Why do these exist

[Anonymous Coward]

Check the policies of a lot of major banks --- they often require $1500+ balances to keep a free checking account; otherwise, it's $15+ fees per month (which will eat through your "couple hundred dollars" pretty quick). You may have been fortunate to have lived your whole life without ever worrying about not being able to come up with a piddling $1500, but there are many working people who do not enjoy such privilege. And, the cheaper the checking account (low minimum balance, "free"), the harder the bank will be working to scam customers with compounding gotcha fees ("oops, we delayed depositing your paycheck while accelerating the rent check, so that's a $35 bounced check fee, $45 insufficient funds fee, $45 for overdrawing on the $35 bounced check fee; have a nice day.").

Re:Why do these exist

[Grishnakh]

Unless things have changed, most credit unions have membership requirements, such as being an employee of some big company they're affiliated with.

I declined and walked out a few years back when I realized what they were asking of me and asking me to sign

Can you elaborate?

Re:Why do these exist

[Grishnakh]

Can you imagine buying a house with your credit card, and running that balance for decades? That's what it was like -- so be careful what you wish for when pining for the 80s, especially regarding interest rates.

I realize the interest rates were high back then, but house prices also weren't grossly inflated by speculation and a bubble back then the way they are now. Also, the credit card comparison isn't quite fair: yes, the interest rates were high, but mortgage interest has always been simple interest, not compounded as it is with credit cards.

Re:Why do these exist

[Grishnakh]

Not a bank. That's a credit union.

Usually, credit unions have some kind of membership rules: you have to be an employee of some big company, or the local government, or whatever entity the CU is affiliated with. Some random poor person can't just walk in off the street and join. The whole idea of a CU, historically, was to provide banking services to a select pool of people who are, on average, financially very stable, so the institution doesn't have to assume the same risk a regular deposit bank does with its customer base.

Re:Why do these exist

[PeeAitchPee]

Real estate prices inflated by speculation in 2014? Where? Maybe in San Francisco, or Manhattan, or the ultra-wealthy DC suburbs, but not in too many other places. Most markets are still recovering from the implosion and are *barely* beginning to show signs of that recovery despite years of the lowest historical interest rates ever. Borrowing money to buy a house isn't free, but it's as close to it as it's ever been, especially if you have made good financial decisions. One of the reasons the Fed has kept rates so low is precisely that -- housing lobbyists were screaming that raising rates even a tiny bit would damage the recovery. Again, I'd rather get a reasonable mortgage rate on my house and a crappy return on a savings account than be shanked by the banks for many hundreds more / month in interest, for decades -- but I guess that only impacts, you know, people who buy houses and actually plan to be responsible and pay on them.

Re:Why do these exist

[Anonymous Coward]

Pretty hard in quite a few places where the last "big" bank pulled up stakes and the nearest credit union is outside of walking distance. Even the traditional "mini-branch" in a grocery store is empy is several of these communities.

Just because you can't picture it, doesn't mean it's impossible.

Re:Why do these exist

[Quila]

Check cashing is there for undocumented people (who can't provide the basic information to get an account, but are occasionally paid by check).

Strange concept, people who are in a country illegally, having broken that country's laws, have difficulties doing business in that country.

My sympathy factor is about zero.

Re:Why do these exist

[mdmkolbe]

Could you elaborate on what makes it not cheap?

Re:Why do these exist

[ColdWetDog]

What I don't get is why would any company bother to deal with paper money and/or checks(?! good god, I think it was the 80's when I actually saw one last time).

Here in the "civilized" world (ie, the Great Satanic United States), paper checks are a definite reality. I consult on several jobs. Including State and Federal contracts. The US Federal system can direct deposit contractor funds, in fact they prefer to do so. The State of Alaska, not so much. City / County as well. So every couple of weeks I trundle down to the bank and give the nice teller person some paper things.

So, if you want a joyful trip down memory lane, bring your magnetic strip VISA card (no chip and PIN here) and come to the USA.

USA! USA!

Re:Why do these exist

[operagost]

To the low-information-voter who modded me down: look up "New Agency proposed to oversee Freddie Mac and Fannie Mae" in the Sept. 11, 2003 NYT and Barney Frank's press release from September 8, 2008.

Re: Why do these exist

[pnutjam]

Chase offers a pretty good solution for the unbanked. Their chase liquid card does everything tmobile appears to be doing and the only fee you are charged is a monthly $4.95. You can deposit checks at and ATM, at a branch, or with your phone.

I personally have a hard time trusting banks, they want to hit you with fees all the time, but Chase has been doing very well with this card. I'm flabergasted by people who want to use their phone for banking. Hmmm, let me think of one company that rips off more people then banks....(maybe...)

Re:Why do these exist

[pnutjam]

Try using a 3rd party check with those debit cards (AKA cashing a check).

Re:Why do these exist

[Sentrion]

Or they are a single parent working two jobs, living paycheck to paycheck, trying to do what they can to better themselves, but in the meantime don't have the money or patience to deal with $34.50 overdraft fees after the bank auto-debited their $15 monthly service fee a day earlier than expected. Banks are horrible services to deal with if you actually NEED to use ALL of your money before the next payday.

A person in this scenario, if they are going to have a cellphone anyway, could save a lot of time, money, and hassle if they could reload a prepaid debit card on the go with a mobile deposit app. If the debit card fee is less than $15 each month, and if mobile deposits were free, this would make such a service worthwhile and cost effective for millions of people. If they could make transfers to other mobile users without using a card or check then that could be even more useful. I could definitely see this appealing to lots of college students working part time jobs to scrap by.

Re: Why do these exist

[dead_user]

Chase can suck my balls. They will never get another red cent of mine. When my wife and I were both laid off I called all my credit card companies asking to be put on a payoff plan, at a reduced interest rate. Every company I called was happy to do so except Chase. Even Sears, with their higher nominal base rate, dropped their rate to 6%. Chase simply stated that if I didn't make the minimum payments they would send me to collections. Luckily, thanks to everyone else helping out and the fact that at least I was able to quickly find work I was able to completely eliminate my credit card debt in under 5 years. If everyone had behaved like Chase, I would have simply declared bankruptcy and screwed every creditor over. I wouldn't have had a choice. Fuckers

Re:Why do these exist

[Uberbah]

You show up in the bank with some money and tell them that you want to make a deposit. Couple of hundred bucks would do it. Banks love money. If on the other hand you show up with no money and ask for a credit, well than this is a different story. Did I say that banks love money?

Did you say you were willing to go hungry/get evicted/skip car repair and lose your job, so you can leave $200 at the bank? Not quite as detached as McDonald's holiday tip that their minimum wage workforce tip the pool boy, but same genre.

Re:Why do these exist

[Solandri]

In the US, most banks have free checking accounts

Citation needed.

http://www.depositaccounts.com/blog/2007/12/introduction-high-yield-checking-deals.html
http://www.depositaccounts.com/us/checking/reward-checking-accounts.html

The best checking accounts are not only free, they actually pay you. Most of these accounts have no fees, no minimums (in fact they have a maximum). The banks/credit unions make money off of them when you use your debit card for purchases. The merchant pays part of the purchase price as a transaction fee to the bank/credit union (more than for a credit card). You just have to make a certain minimum number of debit card transactions each month. The hardest part is typically a direct deposit requirement, but if your employer doesn't offer direct deposit that requirement can usually be met with a monthly ACH transfer from another account at another bank (can be a savings account so no fee there too).

I know the prevailing thought here is that the poor are the victims and the banks/businesses are keeping them down. But in this case it really is the result of laziness. Not laziness as in unwillingness to work, but unwillingness to research simple ways like this to save (or make) money. The vast majority of people (not just the poor) are too lazy to fully investigate what bank account options are out there. They listen long enough to understand the concept of a "checking account", and just assume they're all the same and grab the most convenient one so they can get back to watching Oprah or playing WoW.

The banks literally make a mint because of this type of laziness. Here's the rule you have to remember: convenient = expensive. When the bank hands you a pamphlet listing their checking accounts, the simplest one they list first is going to be their biggest money-maker. Because it's convenient and it's first, the bank knows most people will go for it, so they make sure to load it up with fees or gotchas which will help them make money. You have to dig if you want to find the accounts which are more favorable to you.

Re:Why do these exist

[AlphaWolf_HK]

They use a dated payroll system and haven't bothered to modernize. This is mainly just a symptom of "get off my lawn" or "why would I use that when this already works just fine" syndrome from older business owners, because using direct deposit is not only easier but it's also cheaper.

Re: Why do these exist

[nmr_andrew]

So, your solution to someone being "unbanked" is to use services, which charge a monthly fee, that are provided by Chase, which happens to be a bank. Maybe I'm missing something.

Re:Why do these exist

[PrimaryConsult]

Credit unions are required by law to restrict membership, but some try to make it as broad as possible. One of the local ones in my area requires either you be an employee of a select few companies, a member of a select few unions, or a resident of any county they have a branch in. That third option is why most of the poor of our region end up with them. They have no fees, and the only minimum is to keep a $5 "share" in the credit union. Check cashing places don't even bother to set up shop in town (for the tin foil hatters the local grocery store chain cashes checks for $2), even in the areas with section 8 housing and $300/month rent for 2 bedrooms.

Re:Why do these exist

[AlphaWolf_HK]

I must be grandfathered....I haven't had a steady income in years, yet I'm a huge credit card user. In fact two weeks ago somebody from another state tried to use my credit card information at seniorpeoplemeet.com and so I had to close the account and wait for them to send me a new card (I'm guessing some merchant had their database compromised.) Being used to living cashless for all of these years sucks when your only means of payment is gone for a week.

I use the credit card for literally everything, yet I also pay it off long before it is due so that I never pay interest either.

Re:Why do these exist

[AlphaWolf_HK]

My bank (USAA) has no minimum balance on my checking account, but if you have a $1,000 or higher balance they pay you interest.

Re:Why do these exist

[femtobyte]

Perhaps you haven't seen the dysfunctional design of many cities in the US. Without a car to get you from the impoverished ghetto side of town to the side of town with minimum wage jobs, you don't have money for food either. The poor are stuck with large transport expenses --- keeping that twenty-year-old oil-burning junker fueled up and able to get across town --- because there is no public transit, or affordable housing near where the poor will be janitors and maids to the wealthier classes. With overall above 10% unemployment, and greater than 70% unemployment for poorer demographics, "beggars can't be choosers" about limiting employment options. Yes, it's ridiculous and inefficient to make car ownership necessary for so many people; but ridiculous and inefficient is how the US economic system is rigged to work.

Re:Why do these exist

[AlphaWolf_HK]

My credit union does free checking, and my bank has a deal where there's no minimum balance, but if you have at least $1,000 in it they'll pay you interest (USAA).

Re:Why do these exist

[Grishnakh]

You've got to be kidding. Poor people don't have employers who do direct deposit, and when they're working 3 jobs, they sure as hell don't have time to do ACH transfers from other accounts, or to do all this research you talk of. You're just another typical right-wing Fox News-watching American who hates poor people.

Re:Why do these exist

[Uberbah]

My sympathy factor is about zero.

Probably because you're the descendent of invaders pretending that the descendents of native inhabitants are the problem, and/or supported policies that have trashed the governments and economies of said natives.

Re:Why do these exist

[Grishnakh]

USAA is for military service members only. Some random poor person can't get an account there. They don't even have physical locations; what good is that to some poor person who wants to cash his paycheck?

Does your credit union let anyone join, or do they have selective membership like most?

Re:Why do these exist

[Uberbah]

Real estate prices inflated by speculation in 2014? Where? Maybe in San Francisco, or Manhattan, or the ultra-wealthy DC suburbs, but not in too many other places.

Just about everywhere. Because the same entities that crashed the economy in the first place by betting on housing, have taken their taxpayer-funded bailout money and used it to buy up foreclosed properties to flip or rent.

Re:Why do these exist

[radarskiy]

AC said undocumented, not illegal immigrant.

Have you ever tried to bootstrap yourself into having documentation without starting with any documentation?

Re:Why do these exist

[Uberbah]

Going hungry, getting evicted, skipping car repair. One of these things isn't like the others; a car is a luxury item.

A car is a necessity for having a job in much of the country.

But that's the neat thing about being a Social Darwinist. You get to sneer at the poor applying for food stamps because they should get off their lazy asses and get a (second) job to pay for food and housing. But when they buy an 87 Escort, because they have to have transportation to get that job and that was the best car they could afford.....

......you get to sneer at them a second time for having a "luxury item" when they get hit with a $200 repair bill!

Re:Why do these exist

[LF11]

There are a giant number of people here who are either not "employed" (i.e. being paid cash under the table) or are not US citizens or do not have bill-paying history (young).

The Western banking system completely cuts those people out. Yet almost all of them have cell phones. Thus, T-Mobile's push.

Re:Why do these exist

[LF11]

There are a lot of people immigrants here without papers. No bank accounts for them.

Re:Why do these exist

[Aighearach]

In the US, most banks have free checking accounts. Why don't these people just use a bank?

Not anymore. Banks were doing that for a few years because of competition. Now most charge a fee or have a minimum balance (usually $1500)

Here is a situation I was in when I was younger: the company I worked for closed, and I lost my job. My checking account ended up -$120 at the end of the month. (because I made the mistake of freely using the "free" $400 overdraft protection; which they marketed to me as being credit) Then when I didn't pay them back within 30 days, they closed the account; but since it was a checking account, and negative when they closed it, instead of filing the debt as a credit debt, they filed it as the account closed for "check abuse." So then for 7 years I couldn't open a checking account.

A few months later I went into the bank with a $3000 check and they refused to even attempt to find any way of letting me pay back the account. And even if I had brought them back cash after paying a "check cash" place, they wouldn't have removed the false "check abuse" claim.

Check cashing places serve lots of people, most of whom are enemies of the bank for credit reasons; many of whom have poor banking histories; and even for varied reasons like hiding money from relatives.

Re:Why do these exist

[LF11]

Completely impossible for someone without citizenship or immigration papers.

And there are many millions of people here in the US in that situation.

But they all have cell phones, and many of them even pay taxes.

Re:Why do these exist

[Uberbah]

And even if you are lucky enough to live on a good public transportation route, and so don't have to spend 4 hours a day on the bus, it probably doesn't run 24 hours a day. Which makes it a problem if the job you can find starts at 5 in the morning, or you have a night shift job that ends an hour after the last bus goes home for the night.

And even if you do live on a good transportation route that runs 24 hours a day, not everyone lives or works in a good neighborhood, where it's safe to walk 6 blocks at night to or from the bus stop.

Re:Why do these exist

[Aighearach]

using direct deposit is not only easier but it's also cheaper.

If you have financial staff, sure. For a lot of small businesses the actual equation is: hire somebody to handle the payroll using direct deposit, or write out the checks myself.

Also if you're using a third-party payroll service, there is a bunch of extra work you have to do interfacing between the employee and the vendor, to get the (secret, sensitive) banking information from the employee to the vendor in a safe way. What is a safe way? How do you know if you're doing it right? You don't know if you're doing it right, because you don't have anybody in-house with that specialty. So it might well save time, effort, and money to pay the few extra cents per printed check that the payroll firm charges.

Re:Why do these exist

[Aighearach]

There are a huge humber of people in the US who are simply unable to get a bank account.

My dad kept the same bank for 10 years after he lost his ID, because the tellers and the bank manager recognized him. When they closed the branch he went months without being able to get to his SS, because he didn't ask anybody for help. From his perspective he was being held down by The Man, and didn't think of that as being very notable, and it wasn't what he wanted to spend his time talking about.

I'd be surprised if this sort of situation doesn't cover over 1 million of those ~70 million bank-less Americans.

Re:Why do these exist

[SeaFox]

Check the policies of a lot of major banks --- they often require $1500+ balances to keep a free checking account; otherwise, it's $15+ fees per month (which will eat through your "couple hundred dollars" pretty quick).

I think you have bad luck with choosing banks. I have to have at least $1500/mo in direct deposits, but my balance drops down below $50 on a regular basis between paydays and averages probably $200 at the most (since i have all my bills send out immediately after the paycheck hits and usually do grocery/other shopping within a couple days after that). The account maintenance fees for not enough deposits is either $6.95 or $8.95/mo I believe. Certainly not more than $10. Overdraft fee is $29 a transaction I think (I actually have overdraft protection now), but the transaction/check gets paid so you don't get blacklisted by any local businesses.

I'm on my banks "regular" checking account, too. Not the free checking. U.S. Bank is certainly not a minor financial institution.

Re:Why do these exist

[Aighearach]

age discrimination, by prohibiting legal adults from obtaining credit cards unless they meet income requirements that are impossible to obtain for most young people, especially students.

This lack of critical thinking skills is what created the problem where the CC companies were preying on students' presumed future incomes before they even had any income, and therefore, before they knew the value of their future income. Then they graduate, and they're actually already so far in CC debt, the first thing they do when they graduate and a get a job is to cancel all their credit cards because all they can afford is a maintenance payment on what they already owe.

Any you may not have considered this, gramps, but income isn't age. I know that is hard to comprehend at your age. But requiring the bank to verify that the income you get is high enough (by their own formulas!) for the amount of credit they extend, that has nothing to do with age.

Re: Why do these exist

[pnutjam]

If you can't open a checking account due to chex systems, and you have been cashing checks at walmart for $3 per check. Chase liquid will open a prepaid debit account for you and if you cash more then 2 checks a month, you are saving money. You are also saving time and alot of other hassles, always wondering if Walmart changed a rule, or how long the line wil be.

The Chase liquid card won't charge you fees for overdrafting, because you can't overdraft. It will go negative slightly to cover you monthly fee, again, no other fees are charged.

I challenge you to find another way to cash more then 2 checks a month for less then $4.95 if someone can't open a traditional checking account.

Even if you are just using the chase liquid card to pay some bills by phone or something, the monthly fee is about the same as a green dot card. With the added benefit that you can reload it at any chase atm (which usually accept cash and checks) for free. Every other prepaid card will charge you for that. And with most other prepaid cards, once your money is on that card you aren't seeing cash unless you pay an atm fee. With the liquid card, I can walk into any branch or pull money out of any chase atm for free. I can also use other atm's for the ATM owner's fee, no chase fee's.

I am just a happy user. I haven't seen a competing product that compares.

Re: Why do these exist

[pnutjam]

I also had amazon do something weird with the way they billed an order. It caused my card to go about $30 negative. There were no fees charged above my usual monthly fee.

Re:Why do these exist

[Uberbah]

Um in case you don't remember, Cash For Clunkers was a limited program, both in terms of duration and number of vehicles accepted. Sorry to have interrupted your Social Darwinism, please feel free to resume sneering at the poor.

Re:Why do these exist

[Aighearach]

What you are missing is the social conditioning where they are told the car is a "necessity" because moving closer to work... is some kind of wimpy liberal thing to do, and the real reason they live so far from work is... public planning. And they can't ride a bicycle, because they're not a hippie and don't want the wind from the bicycle to give them dreadlocks.

Actually, going hungry is the one thing that is different than the others; hunger is a luxury for those too drunk to make it to the soup kitchen. Food is the one form of assistance that is easy to get in the US. Shelter and jobs are much harder to replace.

Re:Why do these exist

[Aighearach]

That reminds me of a funny one I had a few years ago. I had $10 in my account, and so I rented a $1 redbox movie. No problem, right? Wrong!
See, I had been planning for redbox to actually hit my account twice; once for the authorization, and then again for the actual $1 charge. Which is what they had done the few times I had used the service before. But no. They put a $10 authorization in to rent me the movie,(turns out it varies) which went through, but then when I returned it and they charged the real $1, now I was over. Funny thing is, there was no overdraft because the $10 wasn't a charge, just an authorization. But of course, banks have fees for everything, so there is still a fee; $7/day for having a negative account. Takes 3 days for an authorization to expire, when a company like redbox is lazy and does it that way. So that still left me $12 in the hole. I didn't even find out there was a problem until 2 weeks later, either; I figured I had $9 in my account, why would be I be checking on my $9 every day?

Luckily, I know the magic word for this. "Hi, I'd like to have some fees rescinded." Don't ask to have fees "removed," "taken off," or "forgiven." Most banks do not have a policy where they will "take off" fees. However, banks do have a policy of rescinding fees to make a customer happy. That tip was given to me in 1998 by David Cohen, a local Toastmaster and former Chess Club President. US Bank was happy to rescind all the fees... except for the first $7 which they said was my fault for not knowing how much of an authorization I was authorizing. (true, that)

Re:Why do these exist

[Quila]

"Undocumented" is just a modern euphemism for "illegal." If you are here legally, then you have documentation because you applied for it and received it before entering the country. If you don't have it on you because you lost it, you can request new documentation from the government. There is no bootstrapping necessary.

If you are illegal, you are not supposed to be in the country. You have no grounds on which to complain that the country's laws and customs are not friendly to your illegal status.

Re: Why do these exist

[pepty]

Lot's of people work cash jobs just to avoid this situation. .

It would be more accurate to say that lots of businesses pay cash to suppliers and employees to avoid this situation: the small businesses avoid a lot more taxes this way than their employees do.

Re:Why do these exist

[Aighearach]

Sorry to reply to myself, but I just wanted to add: If I hadn't had the social ability to deal with the bank manager in a way that would generate a favorable outcome for me, I'd have lost the account and entered 5 years of Banking Purgatory and I'd just now be climbing out of that. A lot of people lack that skill, and would be (understandably!) angry and scared in that situation, and probably not even understanding which of the companies involved was the one who did something "wrong" to them.

I actually think the poor would be a lot better off if the conservatives would just let the Government provide banking services directly to the poor. When you have the money you can straighten these things out yourself even if you don't know the magic words; but the poor would be better served by a bland, slow, emotionless bureaucrat who could simply add up the real charges, check that everybody got paid, and turn the account back on, with no need for the nonsense "fees" to even be involved.

Re:Why do these exist

[Quila]

BS cop out. Pretty much every country at some point in its history had invasion or colonization providing a portion of the modern inhabitants.

Of course, I'm also a descendant of the "invadees" so I have every right. However, when I did work in a foreign country, I had enough respect for them to apply for a work visa. When I brought foreign citizen family back, I also complied with the laws. I have an exemption from your BS and double grounds to complain about illegals.

Re:Why do these exist

[Aighearach]

It has been substantially relaxed, and in Oregon there is even one whose requirement is that you... live in Oregon.

As to the grandparent, if somebody asks you to sign something and they claim you can't have a copy, ask to talk to the manager. It is most likely a "misunderstanding" (and really the closest copy machine is out of toner). The manager, not knowing if you're just detail-oriented or if you're doing an investigation, will almost certainly clear up the "misunderstanding" for you, even if it means faxing a form to themselves to make a "copy."

Re:Why do these exist

[pepty]

What I don't get is why would any company bother to deal with paper money

Because it helps them evade taxes? An IRS study a while back found that the majority of small businesses significantly underreport their income. Anecdotally, a friend who worked for 7 years doing valuations of small businesses for a business brokerage firm said the same thing. She said business owners were generally upset when they found out that their business was valued as a multiple of their reported income, not their actual income, and that no, they couldn't just start reporting all of their income; they would have to spread the change out over 3+ years or the IRS would catch on.

Re:Why do these exist

[Aighearach]

house prices also weren't grossly inflated by speculation and a bubble back then the way they are now

When it comes to property values, you should be looking only at 30 year price charts. The 10 year chart will move around a lot, but the 30 year chart is very steady. As compared to prices in the 80s, current values are only the expected price growth in most places in the US. The speculation bubble pushed things up, yes; and people who bought at the height of that, the prices had already factored in up to 10 years of future growth. Prices were then flat, and in most cases that curve actually caught back up already a couple years ago.

Re:Why do these exist

[Aighearach]

That is an urban myth. It is what the imaginary slum lord banker would do, but actually they took the money and moved it to other things, such as bonuses.

Remember, the people who stole the money were not the legal entities stealing the money; they didn't steal the money and put it into their own pocket directly. And they also didn't steal it just for the well being of their employer, so the company could buy foreclosed properties. They stole is so the company would convert part of it to inflated bonuses.

The actual companies have a long-standing aversion to holding real estate. They don't force people into foreclosure and then buy the properties back. They force people into foreclosure, auction the property at a loss if needed, and keep their money in other places. Banks don't want to own "things," they want to own numbers. Numbers don't burn down, get eaten by termites, filled up with squatters, or regulated by the local town council. Also, deposited numbers can be borrowed against; and when you're a bank, that means that having $100k in an account is $1m that you can spend. (new math, right? lol) Whereas a $100k house is worth at most $100k, and maybe not even that by the time you get the money.

Re: Why do these exist

[amiga3D]

True, it works both ways.

Re:Why do these exist

[radarskiy]

"If you don't have it on you because you lost it, you can request new documentation from the government."

And I asked you how, but you refused to answer and just reasserted your position.

You are elderly, and born in a rural area where there was no hospital. The farm has been in your family for a century, so there's no mortgage records and the deed has never been updated with the current generation. The church with your baptismal records burned down 50 years ago. All of your older relatives are dead and all of your younger relatives have moved across the country so there's no one to vouch for you. How do you convince somebody in the government who you are so that you can get documentation to prove who you are to the government?

*This is not a theoretical problem*. When documentation requirements started increasing for driver's licenses within the past decade, the rural elderly turned out to be disproportionately impacted for exactly these reasons.

Re:Why do these exist

[DNS-and-BIND]

Perhaps a bank in Mexico would suit them better. What is Mexican banks' attitude towards illegal aliens opening accounts?

Re:Why do these exist

[Quila]

You are talking about extreme outlier cases that can always be resolved because the person is in reality a citizen. You specific case probably doesn't exist.

You know as well as I that almost all cases of "undocumented" people involve illegal aliens. You know that when people speak of "undocumented workers" they are referring to illegal aliens, not the 90 year-old lady on a farm. You know that these services are not targeted to the 90 year-old lady on the farm.

Re:Why do these exist

[LF11]

Shitty. Very shitty.

But you are being extremely disingenious. There are plenty of people who were born here and simply have no documentation of their citizenship. We call them "homeless" and try to pretend they don't exist. But they do exist, and one of the major impediments to their improvement is a lack of access to any sort of financial system.

Re:Why do these exist

[DNS-and-BIND]

So, what do Mexican banks do when illegal aliens try to open a bank account? Just curious.

Re:Why do these exist

[Uberbah]

BS cop out. Pretty much every country at some point in its history had invasion or colonization providing a portion of the modern inhabitants.

You bullshit. You can't compare ancient history to consistent bipartisan policy towards Latin America with a straight face. You think the US-supported coup against Chavez took place during the Roman Empire? Under the delusion that NAFTA, which put farmers south of the border out of business with subsidized American crops - was passed during the Jefferson Administration? And lets not even talk about all the right wing government supported by St. Ronnie who committed massacres and terror campaigns.

Of course, I'm also a descendant of the "invadees" so I have every right.

So you're a hypocritical sociopath. Good to know, because...

I had enough respect for them to apply for a work visa

...there is no way your self-centered ass is in compliance with the various treaties the U.S. has signed with the native tribes that used to live where you condo sits, before they were subjected to genocide and land theft. So take your "illegal immigrant" bullshit and choke on it.

Re: Why do these exist

[LF11]

Without proof of citizenship you cannot open an account.

Re:Why do these exist

[Quila]

You bullshit. You can't compare ancient history

You brought up Native Americans, not me.

there is no way your self-centered ass is in compliance with the various treaties the U.S. has signed with the native tribes

Still going on ancient history? In case your comprehension is lacking, I am decended fairly recently in my family line from one of those native tribes. I guess I oppressed myself.

We have a country now, they entered illegally. They deserve no consideration for reaping the benefits of a crime. If the illegal commits a crime he is entitiled to full legal process, then GTFO after it's over. Otherwise, upon determination of status immediately GTFO. That's what my host country would have done to me had I been there illegally, and rightfully so.

Re:Why do these exist

[mgcarley]

Yes. Successfully on more than one occasion.

Re:Why do these exist

[Quila]

In your case, they are allowing it. Sure, your documents may be technically expired but the government has allowed you to stay, so you are legally in the country. Should they want you there even longer I'm sure you can get your documents updated to reflect your status.

Legal immigrants are welcome and valued. A good chunk of my immediate and extended family came here as immigrants legally. However, I do understand that our immigration system needs a serious overhaul.

As for Europe, you have applied for residency so they are allowing you to stay pending a decision, so you are legally in the country. If the decision is no and you don't leave, then you're illegal, so GTFO. In Switzerland if you can't learn the language, then GTFO (that should be everywhere). When I was there I applied for my residency and work permits, was granted, and lived and worked there legally. I don't have much sympathy for those who don't bother to do that.

Re:Why do these exist

[Uberbah]

Urban reality - wages and jobs haven't recovered but the real estate market has rebounded. Due to investors snapping up real estate at bargain prices. Should get a copy of Disaster Capitalism; the vulture capitalists have rigged the system to such an extent that not only are they insulated from economic crashes, they profit from them.

Re:Why do these exist

[Uberbah]

You brought up Native Americans, not me.

You're the hypocrite ignoring time scales and geographic location. Not me.

Still going on ancient history? In case your comprehension is lacking, I am decended fairly recently in my family line from one of those native tribes. I guess I oppressed myself.

Still trying to weasel your way out of your hypocrisy?

We have a country now, they entered illegally.

After the aforementioned right wing policies, legal and non, destroyed their governments and economies. Supported by right wingers such as yourself.

That's what my host country would have done to me

If your host country broke it, it bought it. Same as the United States has ownership over many of the problems in Latin America, as they were created or made worse by American policies. So until you first demand that reparations be made for coups from Chile to Honduras, take the "illegal immigrant" bullshit and go fuck yourself.

Re:Why do these exist

[samwichse]

Check out http://www.co-opsharedbranch.o...

If your institution is a member, you get ~5000 branches around the country you can bank at.

Re:Why do these exist

[Quila]

You're the hypocrite ignoring time scales and geographic location. Not me.

Again, I'm not the one who dug up past history. You brought it up, so that idiotic idea is fair game.

Still trying to weasel your way out of your hypocrisy?

You have yet to identify any hypocrisy. Or, maybe you just don't know the definition of the word.

If your host country broke it, it bought it

My host country was in the past responsible for wars, colonization and outright genocide. That didn't give me the right to break their laws in the present day. I was a legal immigrant, I have family that are legal, so I have every moral right to complain about illegals, no hypocrisy.

If their countries suck then they can immigrate legally. If they don't feel like immigrating legally, then they have no right to complain if they aren't welcomed with open arms. Don't insult a people and then expect to be treated well.

So until you first demand that reparations be made for coups from Chile to Honduras, take the "illegal immigrant" bullshit and go fuck yourself.

After the Russians make reparations for Cuba, and Cuba for helping Chavez ruin Venezuela. Of course we need to pay reparations for more wrongs for that. I get some of the Native American money. Looking back, I see I should be owed money by the Germans, British, and more. But then I'm descended from Germans too, so I guess I have to pay myself. I feel really sorry for blacks who are descendants of former slaves of Native Americans. They must be really confused as to how reparations are go.

The idea of reparations for past wrongs is for the feeble-minded.

Why do we need NFC for financial transactions?

[MatthiasF]

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?

Hallelujah

[StatureOfLiberty]

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.

Re:Hallelujah

[Grishnakh]

That reminds me of an incident that happened in the Phoenix area a few years ago. Some guy was running for local office; his last name was "Robson" (I forget his first name now). Anyway, to help with the campaign, his son went out with other people to post campaign signs around town (in the PHX area, you'll usually see campaign posters on the corners at main boulevard intersections for a few months before an election). He was out one night posting signs, and got robbed. The first comment in the local paper's news story about the incident shouldn't be hard to guess.

T-Mobile targeting future markets

[erroneus]

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.

Re:T-Mobile targeting future markets

[rmdingler]

Yes. They are an emerging market.

The sad thing is most companies write paychecks on banks with existing local branches. Many cash checks drawn on their own accounts for free and even the most avaricious of them will comply for a few bucks ($4-$5 US, locally).

Re:T-Mobile targeting future markets

[PeeAitchPee]

You are correct, but it only makes business sense if you can mitigate some of the inherent higher financial risk that comes with doing business with poor people. That's why it's a fee-based structure, and that's why the fees are so high -- they have to offset the statistically-higher percentage of poor people who (for whatever reason) don't / can't hold up their end of the bargain -- by trying to cash bad checks etc. Many people blame the banks for this simply because "the banks are evil," but in reality, that's why interest rates for people with low credit scores are so much higher than they are for people with good credit scores -- there's a direct correlation between credit score and lending risk. The less risky borrowers are more desirable potential customers, so the banks compete for them by offering them a lower rate.

I do agree that this country needs to have an conversation about the growing number of poor, but it must be an honest conversation -- one that acknowledges that sometimes the poor are exploited by lenders, and also one that acknowledges that it's risky to lend money to poor people, because they're less likely to be able to pay it back.

Lots of precedent

[jratcliffe]

Lots of precedent for this, look at Bluebird from American Express, for example. Essentially the same services.

No surprise, again

[Anonymous Coward]

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?

Re:No surprise, again

[Grishnakh]

Why should the banks do anything to change? They have an oligopoly, and if they lose money for any reason, they get a no-strings bailout from the federal government.

The latest news in New York is that governor Cuomo is going to take a homeowners' foreclosure rescue fund and give it to the big banks.

Re:No surprise, again

[martas]

Yeah, tell me about it. When my sister, who lives in Sweden, whipped out her chip and pin card system while visiting me, I must have looked like a caveman seeing a ferrari.

Re:No surprise, again

[jonwil]

Does the US not have smaller banks or credit unions anymore?
Is there some rule or law that forces people into using the services of the giant greedy corporate banks?

Or have the big banks bought all the little guys out?

Re:No surprise, again

[Grishnakh]

Credit unions are usually only available to certain people, like employees of big companies or governments, or maybe residents in certain areas (which don't usually include the 'hood).

The smaller banks have been disappearing for quite a while now.

seems natural, of not predatory.

[nimbius]

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.

Re:seems natural, of not predatory.

[Hamsterdan]

"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."

Affordable? 50$ is *a lot* of money when you are poor.

Re:seems natural, of not predatory.

[mrchaotica]

T-Mobile already offers a very affordable $50 plan with or without a credit check for their customers

...or a couple of other plans for $20 less than that.

Re:seems natural, of not predatory.

[SeaFox]

"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."

Affordable? 50$ is *a lot* of money when you are poor.

$50? Must be for the talk+text+web plan.
I'm only paying $30/mo for unlimited talk and text through T-Mobile, as a post-paid regular customer.

If you're that bad financially you can't get a bank account and are using payday loan services, you have no business subscribing to outrageous mobile data plans.
Just stick with the $15/mo high-usage limit DSL service and use your Internet at home.

Re:seems natural, of not predatory.

[Hamsterdan]

"Just stick with the $15/mo high-usage limit DSL service"

That's not a bad price, it's actually lower than the plans in Canada. Cheapest I can get here in Montreal is around 40$, and that's with a reseller (Acanac). Going with either Videotron or Bell gives me a big 15GB/month at 5Mbit for 35$/m. We *really* need something like Google fiber to shake the big greedy telecoms

Re:so many middle men

[Wootery]

I'd be less cynical in this particular case: it looks like a genuinely innovative bit of middle-man work, which could serve its target audience better than the current solutions. (If it doesn't, it will of course fail.)

PayPal was an innovation at the time it was new, and served its users better than anything else out there. T-Mobile's new idea looks similar: it aims to serve customers in a way banks are for some reason reluctant or unable to do.

There is a place in the world for these 'middle-men' roles.

Walmart tried it too. May be even google

[140Mandak262Jamuna]

For some reason even such big boys do not break into the strangle hold the credit card industry has on US Economy. The tales of misery emanating from them is very long.

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.

Re:Walmart tried it too. May be even google

[Grishnakh]

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.

The solution to this should be conceptually simple: a "gang" needs to get together and steal the identities of various rich people, CEOs (especially those in banking), politicians, etc. Give away those identities (name and matching SSN is all that's needed, as you say) on the internet in places where lots of nefarious people will use them.

Re:Walmart tried it too. May be even google

[rsborg]

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.

The solution to this should be conceptually simple: a "gang" needs to get together and steal the identities of various rich people, CEOs (especially those in banking), politicians, etc. Give away those identities (name and matching SSN is all that's needed, as you say) on the internet in places where lots of nefarious people will use them.

Do you still live in the 90's? Nowadays the FBI and local swat team will raid that "gang" as a matter of priority. We live in a plutocracy. Only money is represented. Remember the golden rule: he who has the gold makes the rules.

And then?

[Taibhsear]

What happens when you decide a different company has better phone service but all your money is locked up in tmobile banking?

Re:Are checks still a thing in the USA?

[Anonymous Coward]

Yep, because it is the only way (other than cash) to transfer money from a commercial entity to personal entity (or the other direction) without paying a fee per transaction.

I hate checks too, but I'm not going to pay a convenience fee to use my debit card or call someone up on the phone to read off the number.

Africa leads the US

[mmsimanga]

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

Re:Yes. Freedom.

[xorsyst]

Of course we still have cheques. Unlike the GP, we seem to have to write them for quite a lot of after-school clubs and things. It does seem very last century to me.

so how is this different

[datapharmer]

Great service. It sounds suspiciously like a bank account... so their big breakthrough is you get a checking account with no checks?

Making Direct Deposit Easier

[necro81]

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?

Re:Making Direct Deposit Easier

[sylvandb]

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 ...
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?

If only!

When setting up new job direct deposit in 2008 and another in 2012 they BOTH insisted not only on a paper form, but on a voided paper check attached to it! Uh, I use a bill pay service, I don't write my own checks. I don't know if it was HR/payroll department requirement or the payroll processor (don't remember who it was for the 2008 company, but currently it is ADP, talk about stuck in the dark ages...).

I'm just glad that everything else will accept my routing and account numbers without the paper check. For example, on a mortgage refi closing they offered me an annual rebate if I agreed to let them direct draft payments from my account. They wanted a paper check. When I didn't have one, they told me I could wait until the closing was processed and the mortgage showed up on the website, and I could sign up there for automatic payments.

But I am getting heartily sick of having to sign and return paper forms! A few places allow fax, and a very few allow scan and email for anything with legal implications. Where is my legally recognized digital signature???

Hello, 1.5 decades ago was the turn of the 21st century, not the 20th...

Re:Making Direct Deposit Easier

[PeeAitchPee]

Direct deposit is "a pain in the ass to set up" because of the required accountability and tax compliance. They need a paper trail if someone in the chain tries to pull a scam, up to and including the payroll processor. They also want it doc'd that you set your witholding via a W-4 in case there's ever a discrepancy. It should literally take less than five minutes (if that), even for a new employee -- my business does it a half-dozen times a year or so. It's a common sense regulation that protects the employees, the employer, and the payroll processor -- let's not dump it because a few lazy folks don't want to fill out a form and provide their SSN or look for their account and routing #s.

Re:some like it trashy

[jddeluxe]

I think your supposition is extremely flawed. Over the course of the last year or so the influx of new subs into T-Mobile is primarily former postpaid customers from the other carriers...

Re:Yes. Freedom.

[serviscope_minor]

In the U.S. we still have a little bit of freedom.

This is one of the most bizarre claims of "freedom" I think I've ever heard.

Of course we're still "free" to use cheques, and often companies still do for various things. But, the cheque guarantee system was shuttered.

Cool idea

[riis138]

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.

Re: Cool idea

[iamacat]

I would gladly pay $60 to at&t for a better coverage than my $40 T-Mobile plan. But their bill comes to $90 by the time you add texting and then I would still go over the data limit and get charged god knows what. So it got to the point where I compromise by having a phone that usually works rather than breaking the bank for 100% coverage.

Re:Cool idea

[rwa2]

That's fine, Verizon indisputably has the best coverage for the wide swaths of exurban / rural America. T-mobile only really has solid coverage in urban / suburban areas and highway corridors. For me and many people, that's fine... I'll spend the rest of the money I save on home internet and wifi.

Two solutions

[ub3r n3u7r4l1st]

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)

you are blacklisted by ChexSystems

[peter303]

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.

Welfare

[istartedi]

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.

Re:Welfare

[Aighearach]

First you claim the poor are rational economic actors. Then you start proposing to base welfare on rational economic factors.

I think you're entirely missing the point of the class war.

They don't care

[nobuddy]

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

Re:They don't care

[davester666]

Oh yes they will you scum. not paying taxes on your tips is why our corporate tax rates are so high, necessitating corporations to move as much money as they can overseas.

And this is one of those

[nobuddy]

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.

passbooks paid 4% interest for decades

[peter303]

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.

cell-banks in Africa for a decade

[peter303]

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.

Then you are privileged.

[nobuddy]

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.

Re:Then you are privileged.

[pnutjam]

Another issue (invisible to most people) is avaliability of funds. If I take a check to my bank and cash it, I might not be able to use that money for 3-5 days.That's along time if you are staring at an eviction or hungry kids. I've heard of people who will cash that check at the issuing bank (which is now a fee transaction), then put that cash into their own bank so it is available immediately. That kind of thing is hard for many people to comprehend, but it's more common then they think.

Re:Then you are privileged.

[AlphaWolf_HK]

Except this isn't a symptom of being poor, rather it's a symptom of poorly managing your finances. It's really *really* easy to get a free checking account, but if you're a dumbass and regularly get NSF on checks you write, then you'll eventually get blacklisted and nobody will give you shit. This is incredibly easy to avoid doing, just most people who are poor typically have no idea how to manage money (which is part of the reason why they're poor -- I can't tell you how many people I know who have better income than I do yet live really poor, and it's mainly because they don't know shit about managing money.)

I remember getting my first checking account when I was 18 without having to get my parents to sign for anything, and I got that checking account because the bank offered a free $20 gas card for doing so. I really didn't need it because I already had a savings account, but I so rarely withdrew money from it that I never had to worry about any fees (my withdrawals always come in spurts.)

I'm one of those people (apparently rare) who uses nothing but credit cards to buy everything, yet never pays a dime in interest because I pay the balance long before it is due. In fact just this month my bank gave me $130 free on my credit card as a rewards bonus, so I actually get paid to use a credit card.

Re:Then you are privileged.

[nitehawk214]

Agree completely. This is being helped along by the erosion of the true middle class. Now it is the "Poor" vs. "So poor they can't cannot even afford to eat."

Both categories suck to be in, and both are hard to climb out of. People that deny class warfare are simply ignorant of the situation, willfully or otherwise.

Re:Then you are privileged.

[pheonix]

Your assertions (pretty much all of them in this post) are a symptom of being so far out of touch with what it means to be poor that you can't fathom the realities of being poor. All bounced checks are not a function of poor money management...in fact, amongst the very poor, one simple error that isn't your favor can trigger a host of terrible consequences. Making a sufficiently small income that being accidentally double-billed by your electric company can over-draw your account is real. Even more damaging is the case where the double-billing doesn't over-draw you, but causes the five other checks you've written for bills to all overdraw instead...at $35 each. Now, a paycheck-to-paycheck living person with no real access to additional money finds themselves $175 in the hole *AFTER* they get their money back from the electric company (which can take a full month). This is not hypothetical...this is a reality from a time in my life during which I was below the poverty line by a significant margin; and I wasn't even close to as poor as you can get, I was positively swimming in opportunity compared to many Americans.

Sometimes, people who are poor are poor because they're poor and no amount of financial management will circumvent the situations that created their current poorness so as to allow them an out. You can be born poor. Tragedy can make you poor. I do, however, appreciate the "blame the poor" mentality that your class privilege has allowed you to adopt. I know first-hand how hard it is to break the mindset of "just get a better job and manage your money better, stupid poor people".

Re:Then you are privileged.

[coolsnowmen]

Thank you for taking the time to give a good example of this. I never knew what "poor" in america was until I started doing some vounteer work and met some people I otherwise wouldn't have known existed. Also, some recommend this movie: http://www.imdb.com/title/tt17....

The middle class ideal that "just managing your money better" does work for the middle class. But for us, that decision realistically is, eating out less, going to the movies less/ not at all.

For the poor, who are living below the poverty line, the choice is, "not eating tonight so my kids can eat". "Paying the gas bill instead of the eletric bill so we don't freeze todeath, but now how to my kids do homework w/o lights?"

Impossible, for many

[nobuddy]

A bank account requires a credit check and a checking history check. bounced some checks last year? no account for you.

Good idea, not the best venue?

[iamacat]

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.

Re:Good idea, not the best venue?

[iamacat]

While that's nice, a debit card is a lot safer to carry around than a wad of cache.

Tyler Durden

[ThatsNotPudding]

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!

Re:so many middle men

[pepty]

I think you can stay cynical: a no-fee system probably won't be chosen by employers that pay wages via a debit card in return for a kickback from the debit card fees, ditto for things like unemployment benefits debit cards in states that already have cozy relationships with big banks.

Re:Yes. Freedom.

[redback]

Why on earth would you want to write a cheque?

Re:so many middle men

[lsatenstein]

I'd be less cynical in this particular case: it looks like a genuinely innovative bit of middle-man work, which could serve its target audience better than the current solutions. (If it doesn't, it will of course fail.)

PayPal was an innovation at the time it was new, and served its users better than anything else out there. T-Mobile's new idea looks similar: it aims to serve customers in a way banks are for some reason reluctant or unable to do.

There is a place in the world for these 'middle-men' roles.

In Canada we have ING bank, which is a branchless bank. You get a debit and credit card, can have your payroll deposited to your account, or transfer money to it. Their fees are the lowest in the country, and their interest a touch better than banks. You may even get your mortgage from them.
We are a checkless society, but for a fee, you may get checks to issue. (Many landlords want a dozen post-dated cheques for the rent, so you may obtain this).