Wal-Mart Stores Inc. (Bentonville, Ark.) announced it will open Wal-Mart MoneyCenters inside 1000 of its stores by the end of 2008 and will launch a Wal-Mart MoneyCard, a reloadable prepaid Visa card.
Wal-Mart said the MoneyCenters “will assist customers who are outside mainstream banking with convenient, nationwide access to low-cost money services, including check cashing, money orders, bill payment and money transfers.”
“Many of our customers are paying too much, traveling too far and not being well-served,” said Jane Thompson, president of Wal-Mart financial services. “But they still need to pay their bills, cash their checks and transfer money. We're offering them a safe place and a card to help them manage their money. We've seen firsthand what a difference that can make. It changes lives.”
The initial launch will be for 225 centers, with plans to double to 450 by the end of this year and then more than double again to 1000 by the end of 2008. According to this morning’s New York Times, Wal-Mart’s presence would be roughly equivalent to Citibank’s in the United States, and its daily foot traffic would dwarf that of most credit unions, check-cashing outlets and convenience stores. Wal-Mart’s pricing power and proximity could also give it an advantage in serving consumers who do not have a checking account or are intimidated about going into a bank.
The moves are seen as a precursor to even wider offerings, like mortgages and home equity loans. Thompson called the prepaid cards and money center services “foundational products” that the retailer would build upon.
Earlier this year, the retail giant gave up its plans to go into the banking business after being discouraged by the Federal Deposit Insurance Corp. and the U.S. Congress.