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T-Mobile Jumping Into the Check-Cashing Industry

Soulskill posted about 6 months ago | from the all-about-the-benjamins dept.

The Almighty Buck 211

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.'"

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so many middle men (-1)

Anonymous Coward | about 6 months ago | (#46034577)

maybe if all these middle men GTFO people would be better served than all these rent seekers wanting their free money

Re:so many middle men (5, Insightful)

Wootery (1087023) | about 6 months ago | (#46034807)

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.

But it's German only (-1)

Anonymous Coward | about 6 months ago | (#46034585)

And what good is that?

Why do these exist (1, Interesting)

binarylarry (1338699) | about 6 months ago | (#46034589)

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

Re:Why do these exist (2)

Lodlaiden (2767969) | about 6 months ago | (#46034597)

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 (1)

amiga3D (567632) | about 6 months ago | (#46034611)

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 (0)

Anonymous Coward | about 6 months ago | (#46035501)

Wow, you just made it seem like cash is such a valuable service that check cashers are doing people a favor, way to go hero.

Go to your local pawnshop, tattoo parlor, check casher strip sometime and watch who uses it. All different types get ripped off there.

BTW, "use a bank" is not a answer to everyone. Nothing is free, that bank is out to make money off you like any other business, and if they can't - they have ways of discouraging your business like minimum account balances, or direct deposit requirements.

Carting cash around isn't free either, someone has to pay for that armored truck to show up, and lots of cash in the sort of places you have check cashing stores is high risk.

All this to say there is a whole spectrum of services available (I didn't mention prepaid debit), they all exist for a reason and you are treated better, the better off you are. Even prepaid debit providers reward you when you add direct deposit. Check cashing is about the bottom end of this, their customers generally get pretty fucked.

Re: Why do these exist (1)

amiga3D (567632) | about 6 months ago | (#46035925)

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.

They don't care (1)

nobuddy (952985) | about 6 months ago | (#46036467)

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: Cashless at your own risk (0)

Anonymous Coward | about 6 months ago | (#46036771)

Going state mandated cashless may cause a recession in the united states!

Re:Why do these exist (0)

Anonymous Coward | about 6 months ago | (#46034651)

that's why we have invented visa electron AKA debit cards.
practically the bank has no risk, so it doesn't matter if you're bad credit. and checks are a thing of the past too... if you want to give paper money then FUCKING GIVE JUST THE MONEY! what's so fucking hard about that? clinging on to the money for interest for couple of days more??

only thing you would need these is if you don't have ID, have fake ID or some other reason why you don't want to exist as a person. that is, in every other western country than USA.

I'm from Finland, where you can get visa electron even if you have shitty credit - and guess what, you can use that visa everywhere in the world!

Re:Why do these exist (1)

Anonymous Coward | about 6 months ago | (#46034935)

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 (0)

Anonymous Coward | about 6 months ago | (#46035471)

You do realize you can buy debit cards at grocery stores, right? No account required.

And this is one of those (1)

nobuddy (952985) | about 6 months ago | (#46036503)

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.

Re:Why do these exist (5, Informative)

jeauxkewl (1465425) | about 6 months ago | (#46034637)

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 (0)

Anonymous Coward | about 6 months ago | (#46034897)

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).

Re:Why do these exist (4, Interesting)

LF11 (18760) | about 6 months ago | (#46034749)

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 (0)

Anonymous Coward | about 6 months ago | (#46034965)

It is tough to see when one is a privileged rich kid.

I've never been a "privileged rich kid" but even the poorest slackers I've known still had a credit card and/or checking account.

whoo, wow, let them eat caek... (0)

Anonymous Coward | about 6 months ago | (#46035457)

It is tough to see when one is a privileged rich kid.

I've never been a "privileged rich kid" but even the poorest slackers I've known still had a credit card and/or checking account.

I think you're mistaken.
It's pretty bad when these people have slipped so far under you don't even see them.

Then you are privileged. (5, Insightful)

nobuddy (952985) | about 6 months ago | (#46036609)

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:Why do these exist (1)

DNS-and-BIND (461968) | about 6 months ago | (#46035019)

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

Re:Why do these exist (1)

RabidReindeer (2625839) | about 6 months ago | (#46035065)

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 (0)

Anonymous Coward | about 6 months ago | (#46035155)

I don't believe that for a second. If you're employed, a US citizen, and have bill-paying history to prove your residence, then getting a bank account is easy.

Re:Why do these exist (1)

Bacon Bits (926911) | about 6 months ago | (#46035289)

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 (1, Interesting)

operagost (62405) | about 6 months ago | (#46035403)

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 (0)

Anonymous Coward | about 6 months ago | (#46035415)

BS.
I moved to the US (from Canada) and almost nobody would not take my Canadian Credit history. I was an adult with a credit score of zero pretty much like the scenario you point out.

My "first" US credit card was the typical "secured" garbage with a $250 limit even though i had a decent income. It took some time but i was able to build my score up to the high 700's and get any card I wanted.

As for banking, I disagree with the parent on the "US citizen" part as i wasn't and still got a bank account. It was a pain, and they wanted all sorts of documentation from DHS but eventually opened one for me.

A passport or some form of gvt issue ID opens a lot of doors (the US banks were not too keen to open stuff off my Ontario drivers license). Once they had DHS paperwork in their hands they were willing to work with me.

Re:Why do these exist (0)

Anonymous Coward | about 6 months ago | (#46036095)

This.
I was able to open an account with just my passport and immigration forms, and some cash.
I didn't have a drivers license, and I didn't have a SSN.
I find it hard to believe that you can't open some shitty bank account if you have some form of income and a US passport.

Re:Why do these exist (2)

pesho (843750) | about 6 months ago | (#46035733)

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 (1)

Anonymous Coward | about 6 months ago | (#46035979)

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.").

you are blacklisted by ChexSystems (1)

peter303 (12292) | about 6 months ago | (#46036349)

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.

Re:Why do these exist (1)

Anonymous Coward | about 6 months ago | (#46036453)

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.

Impossible, for many (1)

nobuddy (952985) | about 6 months ago | (#46036629)

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

Re:Why do these exist (3, Interesting)

Anonymous Coward | about 6 months ago | (#46034835)

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 (1, Troll)

Quila (201335) | about 6 months ago | (#46036787)

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 (0)

Anonymous Coward | about 6 months ago | (#46034863)

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

 

They are illiterate, don't trust banks, or can't get a checking account because they have a history of bounced or bad checks. They may also have an invalid SSN. In short, they are the underground economy and don't participate in the mainstream.

Re:Why do these exist (4, Insightful)

Grishnakh (216268) | about 6 months ago | (#46034937)

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 (1)

xorsyst (1279232) | about 6 months ago | (#46035169)

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 (2)

the eric conspiracy (20178) | about 6 months ago | (#46035339)

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

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

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 (1)

Cro Magnon (467622) | about 6 months ago | (#46035455)

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%. :(

passbooks paid 4% interest for decades (1)

peter303 (12292) | about 6 months ago | (#46036509)

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.

Re:Why do these exist (2)

torkus (1133985) | about 6 months ago | (#46035485)

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 (1)

Grishnakh (216268) | about 6 months ago | (#46036137)

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 (2)

hendrips (2722525) | about 6 months ago | (#46035535)

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 (1)

mdmkolbe (944892) | about 6 months ago | (#46036897)

Could you elaborate on what makes it not cheap?

Re:Why do these exist (1)

PeeAitchPee (712652) | about 6 months ago | (#46035691)

had good interest rates

This is because historic interest rates were insane at the time -- the highest they've ever been [yahoo.com] . 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 (2)

Grishnakh (216268) | about 6 months ago | (#46036173)

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 (1)

PeeAitchPee (712652) | about 6 months ago | (#46036441)

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 (0)

Anonymous Coward | about 6 months ago | (#46035705)

My bank does. No minimum balance requirement, other than "must be positive at least once a month". They do have a pretty high overdraft fee at $30 a pop.

LGE Community Credit Union in suburban Atlanta.

Re:Why do these exist (1)

Grishnakh (216268) | about 6 months ago | (#46036209)

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.

Go to a poor neighborhood in the USA... (0)

Anonymous Coward | about 6 months ago | (#46035031)

...and count the number of banks vs. the number of stores selling prepaid wireless. If nothing else, THIS is the reason that T-Mo can get into check cashing and "just get a bank account" isn't a satisfactory answer.

Re:Why do these exist (1)

LoRdTAW (99712) | about 6 months ago | (#46035039)

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:TEA PARTY 2016 (0)

Anonymous Coward | about 6 months ago | (#46036891)

Which led to rise of the TEA PARTY!

Re:Why do these exist (0)

Anonymous Coward | about 6 months ago | (#46035105)

There are very few free bank accounts anymore unless your employer does direct deposit. Even then you might be looking at fees if you don't keep $X dollars in the bank.

Re:Why do these exist (3, Informative)

Anonymous Coward | about 6 months ago | (#46035183)

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 (1)

operagost (62405) | about 6 months ago | (#46035329)

Let them eat cake?

Re:Why do these exist (1)

beltsbear (2489652) | about 6 months ago | (#46035617)

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.

Welfare (2)

istartedi (132515) | about 6 months ago | (#46036381)

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.

proof (-1)

Anonymous Coward | about 6 months ago | (#46034601)

T-Mobile are most definitely crooks.

Why do we need NFC for financial transactions? (1)

MatthiasF (1853064) | about 6 months ago | (#46034625)

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?

Re:Why do we need NFC for financial transactions? (0)

Anonymous Coward | about 6 months ago | (#46034759)

Pure convenience.

QR-Code: Start QR app, wait for it to scan image (may or may not succeed on first try).
NFC: Slap phone against terminal, done.

Making it convenient to spend money is a good thing as far as businesses are concerned.

Hallelujah (2)

StatureOfLiberty (1333335) | about 6 months ago | (#46034645)

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 (1)

Grishnakh (216268) | about 6 months ago | (#46034961)

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 (3, Insightful)

erroneus (253617) | about 6 months ago | (#46034693)

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 (1)

rmdingler (1955220) | about 6 months ago | (#46034795)

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 (1)

PeeAitchPee (712652) | about 6 months ago | (#46036761)

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 (1)

jratcliffe (208809) | about 6 months ago | (#46034697)

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

No surprise, again (5, Interesting)

Anonymous Coward | about 6 months ago | (#46034699)

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 (1)

Grishnakh (216268) | about 6 months ago | (#46034977)

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 (0)

Anonymous Coward | about 6 months ago | (#46035767)

Checks in the mail. Seriously, folks?

Yes, seriously. Do you not understand the term or the value of "float"?

Re:No surprise, again (0)

Anonymous Coward | about 6 months ago | (#46035797)

Where in Europe can you use personal checks? I haven't seen one since the early seventies.

Re:No surprise, again (1)

martas (1439879) | about 6 months ago | (#46036369)

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.

seems natural, of not predatory. (1)

nimbius (983462) | about 6 months ago | (#46034735)

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. (1)

Hamsterdan (815291) | about 6 months ago | (#46035319)

"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. (0)

Anonymous Coward | about 6 months ago | (#46036107)

I spend ~$50 per year on a pre-paid TMobile phone (I don't spend lots of minutes yakking away with friends/family, but it's plenty for all the times I do need to make a quick call). Initial investment is a bit spendy for the dirt-poor: you need to start with $100 of minutes all at once to make future funds persist instead of expiring after a month. Still, pretty cheap once you stretch it over several months (or, over about a decade in my case). T-Mobile is good at making services for the thrifty (unfortunately, US Capitalism is even better at pushing people into ridiculous poverty).

Re:seems natural, of not predatory. (0)

Anonymous Coward | about 6 months ago | (#46036271)

I don't know where $50 came from. I'm a t-mobile customer and I have two pre-pay phones at a total of $60... ~$30 each. (One costs slightly more because of value-add services but I forget the exact breakdown.)

This wasn't a special deal either. I just put my address in on their website and they mailed me a pair of SIM cards.

Are checks still a thing in the USA? (0, Interesting)

Anonymous Coward | about 6 months ago | (#46034797)

In the UK I've not written or received one for about 2 years now and I expect I'm typical.

Re:Are checks still a thing in the USA? (0)

Anonymous Coward | about 6 months ago | (#46034939)

2 years?

I have not written or received one in the 12 years that I have a proper bank account and earn money.
Almost everything is wire transfer or direct debit here in Germany.
The only exception I can think of is renting a car, where they expect you to pay via credit card.

Re:Are checks still a thing in the USA? (1)

Anonymous Coward | about 6 months ago | (#46035129)

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.

Yes. Freedom. (-1, Troll)

Anonymous Coward | about 6 months ago | (#46035015)

In the UK I've not written or received one for about 2 years now and I expect I'm typical.

Yes, checks are still a thing in the U.S.A. Are you not allowed to have checks in the U.K.?

In the U.S. we still have a little bit of freedom. We can choose whichever payment system we want to use, rather than the one that is forced upon us. We can choose to pay by cash, by check, by debit card, by credit card, by cell phone, by pre-paid debit/credit card, by Pay Pal, by BitCoin(very limited), by Gift Card, electronic transfer(ACH), by wire, by predatory payment services(check cashers, Western Union...), and now by T-Mobile check cashing, as well as many more that I have probably never heard of.

In the U.S.A. it is entirely possible for the average citizen to never write a check. But, if we want to write a check, we can choose to do so and the recipient will gladly accept it. We call this ability to choose at will, "freedom".

Re:Yes. Freedom. (1)

xorsyst (1279232) | about 6 months ago | (#46035195)

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.

Re:Yes. Freedom. (0)

Anonymous Coward | about 6 months ago | (#46035253)

It's not that people are not allowed to use cheques - it's more that they have gone out of fashion and many places no longer accept them because of the perceived excessive hassle in dealing with them when compared with cash, debit cards, credit cards, bank transfers.....

"We can choose whichever payment system we want to use, rather than the one that is forced upon us......"

Just like in the UK

We call this ability to choose at will, "freedom"

And so do we -- we just don't see the need to parrot the party line so frequently -- keep on repeating it comrade and soon you'll believe it :-)

Re:Yes. Freedom. (0)

Anonymous Coward | about 6 months ago | (#46036033)

I don't think personal checks have existed in Finland for decades. I'm 48 and I've never used one.

For the Americans: in Finland you pay bills by transfering money from your bank account to that of the business. IOW, you push money to the recipient's account instead of allowing the recipient to pull money from yours.

Re:Yes. Freedom. (1)

serviscope_minor (664417) | about 6 months ago | (#46035381)

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.

moar bitcoin (0)

Anonymous Coward | about 6 months ago | (#46034815)

=) Yep. I went there.

Walmart tried it too. May be even google (1)

140Mandak262Jamuna (970587) | about 6 months ago | (#46034819)

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 (1)

Grishnakh (216268) | about 6 months ago | (#46035011)

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.

And then? (1)

Taibhsear (1286214) | about 6 months ago | (#46034855)

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

Re:And then? (0)

Anonymous Coward | about 6 months ago | (#46034967)

I think we have a winner here.
We can hate on T-Mobile or any other cheque cashing business all we like, but they wouldn't be doing it if their clientele could just use normal, regular banking. Attaching their service to a fundamentally neglected need, from a business standpoint, is brilliant. And if they do a better job/charge less than the competition, its a "win" for everybody. A real win would be not needing this type of service in the first place, but that has nothing to do with T-Mobile.

Reasons For Choosing (0)

Anonymous Coward | about 6 months ago | (#46035287)

People are different and it's interesting. Why does a person choose a particular cell phone provider?

I look at things like cost,

  • call quality/internet signal
  • coverage area
  • internet speed
  • supported phones...

I recently polled a group of university students as to why they chose their provider/plan and I was genuinely surprised at their decision factors. The most overriding reasons were:

  • ease of payment and payment choices
  • website appearance/ease of use(?)
  • supported phones
  • cost
  • internet speed...

some like it trashy (-1)

Anonymous Coward | about 6 months ago | (#46034889)

Well t-mobile knows their subscriber base which is mostly the poorer of the cell phone toting demographic. Might as well put in a liquor store and a payday loan store in their outlets as well.

Re:some like it trashy (1)

jddeluxe (965655) | about 6 months ago | (#46035313)

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...

Africa leads the US (2)

mmsimanga (775213) | about 6 months ago | (#46035187)

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 [econet.co.zw]
M-Pesa - Wikipedia [wikipedia.org]

so how is this different (1)

datapharmer (1099455) | about 6 months ago | (#46035209)

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 (1)

necro81 (917438) | about 6 months ago | (#46035265)

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 (2)

sylvandb (308927) | about 6 months ago | (#46035603)

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 (1)

PeeAitchPee (712652) | about 6 months ago | (#46036973)

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 [daggerpress.com] . 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.

Cool idea (1)

riis138 (3020505) | about 6 months ago | (#46035613)

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.

This Bothers Me... (0)

Anonymous Coward | about 6 months ago | (#46036061)

for several reasons. I'm old school in my thinking and this violates the tenet of doing one thing well. Why are so many companies straying into areas they have no real expertise in and hoping this will work? It rarely works. This is akin to me calling round Strada Pizza and expecting them to make a proper curry or a decent Shepherd's Pie. Not happening.

Two solutions (1)

ub3r n3u7r4l1st (1388939) | about 6 months ago | (#46036065)

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)

cell-banks in Africa for a decade (1)

peter303 (12292) | about 6 months ago | (#46036595)

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.
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