Boost Mobile launches mobile banking for the underbanked

Boost Mobile, the prepaid mobile service provider that built its brand by marketing to young city dwellers, now offers digital checking account and debit card services through a product it has dubbed OmniMoney.

The embedded finance provider Alviere, which is a partner of Community Federal Savings Bank in New York, powers the OmniMoney offering. In its marketing, Boost emphasizes the mobile banking app it offers to OmniMoney users, security features such as instantly freezing and unfreezing debit cards, and the ability to send money to Mexico.

Boost Mobile joins Verizon and T-Mobile on the list of mobile service providers that now offer banking services. While Verizon designed its offering for children and families and T-Mobile is targeting a broader segment of the population, Boost is focusing on reaching the underbanked.

"We're looking to provide basic services for historically excluded communities — where 60 million Americans are underbanked," Stephen Stokols, who heads Boost Mobile, said Thursday in the company's announcement. "Not only do Boost Mobile customers have access to low-cost unlimited wireless services, but now they are empowered to take control of their finances with new tools through the OmniMoney app."

After Boost Mobile got its start in 2001, it tailored itself to young, urban adults by partnering with hip-hop artists and action sports stars in its marketing materials. Since then, it has gone after a broader swath of the population by targeting the wider market of people who purchase prepaid wireless plans.

OmniMoney users will not pay a monthly maintenance fee, but they will pay fees for sending money to Mexico ($3.50 per payment), withdrawing cash ($1.30 for withdrawals from in-network ATMs) and depositing cash and checks ($1 to $4, depending on the circumstances) — all fees that other digital banks have largely eliminated.

Boost Mobile customers can eliminate the fee on sending money to Mexico if they purchase a premium-level mobile service plan from Boost.

Emmett Higdon, director of digital banking for Javelin Strategy & Research, is skeptical. For one, depositing and withdrawing cash to and from accounts is free with comparable digital bank offerings, including T-Mobile Money, which also offers fee-free overdraft protection up to $50. OmniMoney does not offer overdraft protection.

"Functionally there is nothing new here, except perhaps the focus on remittances to Mexico, which may reflect a high concentration of Latino customers among the Boost customer population," said Emmett Higdon, director of digital banking at Javelin.

For its part, Boost maintains it is offering a vital service to people feeling squeezed financially.

"Now more than ever, people are examining their expenses as inflation continues to be a serious pain point," Stokols said. "We are investing in customers who use their phone to power their lives."