Dec. 4, 2018 | by David Jones

The reentry of T-Mobile into the mobile banking business marks what analysts say is a renewed push by U.S. wireless carriers to exploit an opportunity to disrupt traditional banking models that have been trending around the globe. 

T-Mobile officials who asked not to be named confirmed the company has launched a pilot program with BankMobile to test a mobile banking product that would offer a range of services to consumers.

The service will offer customers access to checking accounts that pay upwards of 4 percent interest with no fees that are traditionally associated with incumbent banks, including monthly service fees, overdraft fees or penalties for failure to maintain a minimum balance.

The service will also provide consumers fee-free ATM withdrawals if they use Allpoint ATMs, a firm that has about 55,000 machines located around the world.

Gartner analysts told Mobile Payments Today that the advent of wireless carriers jumping into the consumer banking business is not surprising as financial services are considered another way for these companies to leverage relationships with customers and financial transactions have been a growing business for telco companies around the world.

"It's not been a model that's worked in the U.S., but that doesn't mean it won't in the future," Stessa Cohen, research director, banking and investment at Gartner, said in an interview.

The service replaces a previously launched service T-Mobile operated from 2014 through 2016, but abandoned after the financial services platform failed to gain traction among subscribers.

The service comes at a time of rapid advancement in mobile banking in the U.S., with startup financial technology companies launching mobile banking, lending, financial wealth platforms and other services targeted at millennial consumers.

Incumbent banks like Chase have announced their own mobile banking programs, for example. The Finn mobile banking service was announced earlier this year with plans to offer extensive mobile-first financial services backed by the security of JP Morgan Chase's long history as leading commercial bank.

Chase spokesperson Emily Schaefer said the bank declined to comment on the T-Mobile announcement.

The concept of wireless service providers providing financial services is rapidly growing in developing markets in Asia, Africa, Latin America and Eastern Europe, particularly locations where there are millions of unbanked or underbanked consumers and consumers that lack access to credit cards.

London-based Vodafone offers financial  services in Kenya and several other key markets in Africa and Asia through m-Pesa.

In Poland a large number of consumers have embraced mobile banking and many banks and wireless phone companies have teamed up to partner on offering banking services to consumers, according to Cohen.
 

Topics: Mobile Banking, Region: Americas, Region: EMEA

David Jones

David Jones is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.

Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others,. He recently covered FinTech issues for PYMNTS.com.

He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation.

He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.

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Dec. 4, 2018

Gentek Global, a Melbourne, Australia-based software developer, has launched a payment plug-in technology it calls the first contactless checkout solution for mobile e-commerce, according to a news release.

The technology, called Felix, is an embedded system that integrates mobile apps into web browsers, allowing shopper to tap their contactless payment cards against their smartphones while shopping on the web.

The service allows users to complete the transaction without having to enter card numbers, CVC codes or expiration dates, reducing the ongoing problem of shopping cart abandonment, according to the company.

"By integrating EMV chip and PIN technology into mobile devices, we've been able to transform smartphones into personal payment terminals that are capable of processing contactless, card-present payments in online environments," CEO Owen Newport said in the release.

The Felix technology can be integrated into various transactions, including online shopping, bill settlement, hospitality, airline tickets, hotel stays and other situations. Users need an NFC-enabled Android phone and a contactless payment method and select "tap and pay" and enter a PIN number to complete the purchase.

The system has been tested with Apple Pay and Android Pay and the company is in talks with multiple banks and payment card platforms to make sure the pin-on-glass technology meets PCI compliance standards, according to the release.

The company plans to initially launch the technology in Canada, the U.K., and Australia with a target date of early to mid-2019.

Topics: Contactless / NFC, EMV, Mobile Payments

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