Mobile wallet apps for smartphones have been panned as high-tech gimmickry, but the folks at Pasadena’s Wipit Inc. think they’ve found a low-tech way to make them relevant.
The company makes a mobile wallet app that comes with a prepaid debit card. Customers can use the card to make purchases at a store, say, or withdraw cash from ATMs. The app can be used to pay bills and transfer money. Wipit’s app and card product is designed for people who don’t use bank accounts.
Wipit in September raised a round of series A funding and is now eying expansion. The company’s app had been available only to customers of Irvine wireless carrier Boost Mobile, which offers prepaid cellphone plans mostly to those with poor credit or low income. But Wipit got a wider rollout in the last couple of weeks; the app is now available to anyone with an Android smartphone.
“We’re trying to make sure we can serve the underbanked in a broad way,” said Richard Kang, Wipit’s chief executive. “There are lots of customers who are not on Boost.”
Kang hopes to attract customers of other prepaid carriers, such as Metro PCS and TracFone, as prepaid customers are less likely to use bank accounts. But he also said there are millions of potential Wipit customers who have more mainstream wireless phone plans from the likes of Verizon Communications or Sprint Corp.
That premise helped draw an investment last year from Core Innovation Capital, a Hollywood venture capital firm that invests in financial technology companies that focus on unbanked and underbanked customers. A. Arjan Schütte, Core’s managing partner, said he expects Wipit will find many customers as it expands service. For example, there are many customers of mainstream wireless carriers who pay their monthly bills in cash or pay upfront deposits on their accounts because of bad credit. Those customers could be a good fit for Wipit.
“There are absolutely many millions of Sprint’s customers who look like prepaid customers,” Schütte said. “From that perspective, we think there’s a ton of opportunity.”
Customers can use the Wipit app to check their balance, deposit checks, pay bills and make domestic or international money transfers, while using the debit card to withdraw cash from an ATM or make purchases, much like any other prepaid debit card or credit card.
Kang would not say how many customers have downloaded the Wipit app. According to Google’s app store, the Boost version has been downloaded between 10,000 and 50,000 times, while the version available to all Android users has been downloaded fewer than 1,000 times. Kang said Wipit has not advertised the wider release of the app, but would do so at some point this year.
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