Sprint's Boost Mobile prepaid phone service developed a mobile wallet as a way to provide financial services for its underbanked target audience.

The Boost Mobile Wallet application provides users with a prepaid cash account for paying bills or sending money to friends or family in 135 countries. Users who upgrade to a free Plus account get a plastic Visa card.

"There are many Boost customers that identify themselves as banking or credit challenged so we knew this would be a welcome feature," says Boost spokeswoman Jayne Wallace.

Teens and students also are "definitely an audience that can benefit" from Boost Mobile Wallet because prepaid phones have often been popular with that demographic, Wallace says.

Users can also transfer money between different accounts, and top off their Boost Mobile phone plan within the app. The Irvine, Calif.-based mobile operator announced the app May 21.

In the coming months, users will also be able to scan in a physical check and deposit the funds in the wallet account. Today, users can load money into the wallet account only at authorized Boost dealer locations.

Wipit Inc., a provider of mobile payment services for the unbanked, powers the mobile wallet and provides payment processing for Boost.

"The service Wipit provides is essentially the platform that allows these wallet features, each of which may exist as a separate application elsewhere, but combined into one package for Boost customers," Wallace says. 

Boost Mobile Wallet money transfers will move along the Ria Money Transfer network. Ria is a unit of electronic payments provider Euronet Worldwide Inc.

As with any prepaid account, fees will ultimately determine whether the customer finds value in the service, says Scott Strumello of New York- and London-based Auriemma Consulting Group.

Though the Boost Mobile Wallet carries no monthly fees, it charges an inactivity fee of $1.95 after four months to regular accountholders and $4.95 to Plus account holders, which have the accompanying Visa card.

Users pay $2 to $5 per bill-pay transaction depending on the speed of the payment and the biller.  Plus accounts get one free MoneyPass ATM withdrawal a month and pay $2 for every subsequent ATM withdrawal.

Users pay $3 to load money at a retail store. Boost's fees for money transfers vary based on the exchange rate. For mobile top-up, domestic loads are free and international ones vary by the type of mobile product.

Wipit mobile account transfers are free for Boost customers through a promotion period scheduled to end August 1.

"Our research has shown that a typical prepaid account averages about 17 different fees," Strumello says. "Of course, not every user incurs all of those fees, as it depends on what services you use."

Boost sees an opportunity to serve its unbanked customer base by positioning the Boost Mobile Wallet as a more fee-friendly service than the traditional check-cashing or pay-day loan businesses that the unbanked often need to use, Strumello says.

"Boost serves a segment of the market, maybe many of them immigrants, that doesn't necessarily have bad credit, but has no credit because of various circumstances," Strumello says. "Keeping fees to a minimum will be important."

Initially, Boost offers accounts only for customers in Los Angeles, San Diego and parts of New Jersey. The free wallet app is available to Boost's Android customers and is downloadable in Google Play. The company says it plans to complete a nationwide rollout by the end of the year.

"Boost is in a good position, because prepaid [phones] is where the growth is in mobile, with many carriers considering a prepaid option," Strumello says. "That translates into offering mobile financial services through the phone for that market as well."

PreCash, which provides payment services focused on the underbanked, plans its own mobile wallet for the underbanked. Announced last year, its Flip mobile wallet will offer bill payments, mobile check capture and other services meant to be used with a PreCash prepaid card account.

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