Wal-Mart reaches out to the unbanked
The retail giant could give banks a run for their money.
Customers of the new Bluebird service will be able to use many of the same features as conventional bank account holders, such as withdrawing cash from ATMs, paying bills electronically and making deposits via smartphone. But they won't need to meet a minimum balance or pay monthly, annual or overdraft fees. Bluebird, which began as a pilot last year, is set to launch next week.
The service is Wal-Mart's latest foray into financial services for the so-called unbanked or underbanked. Wal-Mart has financial services locations, called MoneyCenters, in more than 1,000 stores that offer electronic bill paying, check cashing and tax-preparation services.
"Anything that provides clear, transparent pricing for financial services is a good thing," Ellen Schlomer, the executive vice president of the Committee for Responsible Lending, said in an interview, adding that she hasn't had time to study Bluebird in depth.
Shares of Wal-Mart have gained about 26% this year. The company's motives for bolstering its financial services offerings are not altruistic. In theory, if Wal-Mart can make it easier for consumers to manage their money, they will spend more at the retailer. The timing of the announcement, at the start of the holiday shopping season, is no coincidence. Wal-Mart already has slashed fees for its layaway plans. Bluebird, though, will help the retailer all year round.
According to the FDIC, about 10 million U.S. households are unbanked and 24 million are underbanked. Wal-Mart also can afford to treat banking consumers better than traditional rivals because it is not dependent on fees for its bottom line. That is good news for consumers.
High fees are souring many consumers on traditional banks. Data cited by Wal-Mart show that consumers now pay an average of $259 per year for a basic checking account. CRL estimates that the industry earns $25 billion from overdraft fees. Consumers are paying more fees because of changes in banking practices, which include tactics like deducting the largest payments from accounts first, according to Schlomer.
Jonathan Berr is long Wal-Mart. Follow him on Twitter@jdberr.
Wal-mart taking over.. i like this. ...Wal-mart building community grocery store betwen there mega store. more jobs without benefits.
They crushing the competition
They better learn to compete
I will look into it. My bank kills me with fees. I agree overdraft should have a penalty but banks pay is little to NO interest even if you have a considerable amount in the bank that you do not touch.
They are now making their living off fees instead of loaning money to business.
"According to the FDIC, about 10 million U.S. households are unbanked and 24 million are underbanked."
And they are all Walmart regulars.
I love Wal-mart. I just had my oil change and they inspected my car. They found out that i needed a new battery, they saved me a tow job.
I can't wait till they start selling new cars, like the $6000.00 ones from China, and buy it online and delivered to my local Store.
I will able to buy food, automobile, deposit my money in my Wal-Mart bank account, a gun, candy bars and plants for my Garden.
All i need now is a Hospital in Wal-Mart , maybe they can cure my Mental Illness i get every time i go in the store.
More over banks a service that will help the finacially challenged has stepped in to aid those people whom you have overlooked for decades.........and now you want their business! Too bad you didn't want it before. Walmart actually cashes my salary without a hassle when the bank it is drawn on give me hassle everytime because I am not a signer on the account..........I have a financial director for that.
My bank is 45 minutes away, Our company bank is 12 minutes away, and Walmart is 2 minutes away.Thank you Walmart for your money centers!!!!!
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