T-Mobile Shutters Prepaid Card
A little more than two years after its launch into financial services, T-Mobile has confirmed that it’s shuttering its prepaid card program. Citing the competitive marketplace, the carrier is getting out of the business just as the CFPB puts the finishing touches on its prepaid account rulemaking. The move underscores that even with award-winning partners—Blackhawk Network serves as the program manager and The Bancorp as the issuer—a built-in customer base and retail distribution, prepaid financial services can be a tough nut to crack. That’s especially true as compliance costs have gone up and likely will continue that trajectory once the new rulemaking is released.
“Since we launched the T-Mobile Visa Prepaid card, we’ve helped the ‘unbanked’ avoid crazy bank transaction fees,” the telco said in an email statement. “As the market has grown and evolved, there are now more solutions available to consumers to address their prepaid banking needs. As the Un-carrier, we will continue to watch the mobile-first financial services industry to find ways to continue to help solve customer pain points—just like we’ve done with our support for Android Pay, Apple Pay and Samsung Pay on our device offerings.”
A Blackhawk Network spokesperson says: “T-Mobile is a valued partner of Blackhawk Network and we look forward to a continued successful partnership. The move to discontinue the Mobile Money program was T-Mobile’s decision, which they attribute to the competitive nature of the prepaid payments industry.”
Wireless carriers have had mixed results in prepaid financial services. In 2014, the U.K.’s O2 discontinued its wallet, including a companion prepaid card, after 18 months and just last month, Canada’s suretap kept its wallet and loyalty program but ditched its prepaid card. Meanwhile, Wirecard-backed programs with Vodafone and Orange continue to expand in Europe.
Ben Jackson, director of Mercator’s Prepaid Advisory Service, tells Paybefore that T-Mobile is facing a competitive environment that includes traditional players such as Green Dot and American Express, and new entrants into the market such as Starbucks. “They may be seeing their customers choosing these other products or wanting to keep finances and mobile services separate,” he notes. “While having a set of stores and a built-in customer base may seem like instant advantages, T-Mobile may have found that offering financial services products became too much of a distraction from its core business.”
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