Banking Without A Bank Gains Momentum In the US
In a recent chat with senior Indian bankers, noted author and banking disruptor Brett King spoke eloquently about the need to target the unbanked customer, who is not necessarily the daily wage earner or the micro business owner.
Recent developments in the United States suggest that not just banks, companies ranging from retail groups to companies providing charge cards are reaching out to the new generation of consumers whose visit to a bank is rarer than rains in the Sahara desert.
A report published on the American Banker website reports that close on the heels of Walmart, American Express and Green Dot, T-Mobile has come out with a basic checking service for its mobile customers. Clear indications that bank branches are inexorably going down the one-way street to oblivion!
The latest T-Mobile offering comprises a reloadable prepaid Visa card, a mobile banking app and other basic features that go with a checking account, says the article (Read the Full Story).
The article quotes Brett King, who is also the co-founder and President of Moven, the world’s first mobile-only bank as saying that a whole lot of customers are now choosing a prepaid card as their primary day-to-day bank account. “The core differentiation the banks offer is branches, but retailers like T-Mobile and Walmart have stores too.”
The logic behind the move is that most of the unbanked customers prefer cheaper ways to deposit checks and pay for goods and services through their mobile devices, thereby dumping full service accounts at branches.
Of course, T-Mobile refutes that it has any banking ambitions, claiming instead that the new product is just an add-on service to its customers who are looking to avoid the fees charged by check exchangers and other financial providers. Incidentally, Sprint was the first American telecom carrier to offer checking services through mobile devices though it lacked access to ATMs.
On his part, Brett King believes that the market is generating two types of banking, the first being a basic prepaid account and the second a full service checking account. The only real benefit of the latter is the capability of overdraft and ease of obtaining a mortgage.
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