In the last year you may have heard of Bank Transfer Day. Due to new banking regulations people made a mass exodus away from the larger banking institutions to smaller, more local banks and credit unions. For those who have bank accounts, it was a smart decision as many people saw an increase in customer service and a decrease in fees. But for those who do not have a bank account, none of this revolt really even mattered. These are often the people who live paycheck to paycheck, and have no need to store up money since it is gone by the end of the month. For these people there is an alternative to cash, as Wal-Mart’s push into banking has greatly expanded the financial services customers can access at their stores.
The biggest change in their financial offerings is the Bluebird card, which is set for release the week of October 15th. This card offers those who are upset about banking fees peace of mind. It is a prepaid card that requires no credit check and offers overdraft and fraud protection. Those who do not wish to carry cash around with them can simply use the card. The fees are low, and the convenience is great.
This new card is in addition to another prepaid card offered through Wal-Mart. They have a current contract with Green Dot that they will keep despite the new offering. It is not clear why the company is starting another product so similar to one already in existence. However, the Green Dot card is issued by MasterCard and Visa, whereas the Bluebird comes through the services of American Express. Both companies are major players in the credit industry, and both offer benefits and services that certain consumers find appealing.
Both of these cards are in addition to the money centers that Wal-Mart has had in their stores since 2004. These centers, which top 1,500 in number, offer a variety of services. At the center a customer can send money to relatives, open a Wal-Mart credit card, cash a check, have checks printed, and even utilize tax preparation services. In other words, they operate almost just like a bank, but without offering deposit services. While the store would like to see more people using the range of services, the vast majority of the transactions done are check cashing.
Many years ago a friend of mine threw out the idea. He said there are so many people dedicated to shopping at, and so many that are employed by, Wal-Mart, they could essentially form their own town. They could build Wal-Mart cars that run off Wal-Mart biodiesel (from the McDonald’s restaurants located in the buildings). They could open the Bank of Wal-Mart, and even offer subsidized Wal-Mart housing located directly above the store itself. It may take a lot of planning, but there would be thousands of people who would go for it. It may be years before we actually see Wal-Mart towns start popping up, but it does look as though that is the direction the retail giant is heading. The expansion of their financial services is just the start; it is only a matter of time before the money centers offer a deposit feature.