T-Mobile introduced a prepaid card on Jan. 22, following other retailers like Wal-Mart, Walgreens, and Target into the banking world. Michael Goo, vice president of marketing, says the Mobile Money service will serve as an affordable way for Americans to manage their money -- with no overdraft fees, minimum balance requirements, or charges for withdrawing cash from in-network ATMs.
The Visa-branded card can be used to pay bills and make purchases, and users can even deposit checks using a smartphone camera. However, $2 fines will be imposed for such "non-typical" uses as rush demands on checks to be cashed and the use of out-of-network ATMs. Monthly fees will be waived automatically for T-Mobile's wireless customers.
“There is a significant portion of Americans, 68 million adults, that rely on alternative financial services or don’t have traditional accounts, and this product will help free them in terms of time savings and cost savings,” Goo said. “Our product is incredibly consumer-friendly.”
Still, consumer advocates worry about lack of disclosure and looser regulation of prepaid cards in general; and those are issues that lawmakers and federal agencies are likely to address this year. But Jennifer Tescher -- president and CEO of the Center for Financial Services Innovation, a think tank -- says "there is very little fear and trepidation around the prepaid rules that the CFPB might issue. If anything, the industry is waiting for rules and will welcome them because it will help to further legitimize the product. ”