Where Credit 's Due
Wal-Mart provides update on its financial-services efforts at Prepaid Expo
LAS VEGAS -- Announcing the soon-to-arrive halfway mark for a planned network of in-store financial-services centers, Jane Thompson, president of financial services for Wal-Mart, revealed updated information about the chain 's bold outreach to the “unbanked” and “underbanked” demographic at the Prepaid Card Expo held earlier this month.
Among the revelations was the successful introduction of its proprietary credit card, which has a payroll feature that could help convert cash-only customers to card holders—a move that would benefit all retailers, some believe.[image-nocss]
“The Wal-Mart MoneyCard landed last July, and it feels like we have an 8-month-old baby,” Thompson told the general assembly of roughly 2,000. “We 're pleased with the number of cards, the loads, reloads and reuse.”
Last year, Wal-Mart cashed 45 million paychecks worth an estimated $17 billion, Thompson said. Its MoneyCard can tie into that cash flow, as it has the ability to accept direct deposits. She noted also how Wal-Mart, Bentonville, Ark., charges no load fee for payroll checks.
Some in the industry believe Wal-Mart 's moves will help promote the use of cards among the unbanked demographic. “[Wal-Mart 's] putting the cards front and center with the consumer,” said Mark Putman, executive vice president of Memphis-based Money Network, a division of First Data. “It 's important for visibility long-term.”
C-stores, however, have the competitive advantage of being conveniently located, as opposed to Wal-Mart, said Putman, who was attending the Expo. “Wal-Mart 's monthly maintenance fees, fees for ATM usage and reload fees are on the higher end,” he said. “The opportunity for c-stores is being the touch point, the place to load additional funds [with more competitive fees] and create incremental sales from traffic coming through the doors.”
Thompson also detailed the progress of Wal-Mart 's in-store financial centers, which the company began putting into its locations last year. So far, 429 sites have the MoneyCenters. These facilities handle basic services of money orders, bill payment, check cashing and money transfer. The chain is opening new centers at the rate of 15 per month with an ultimate goal of 1,000, Thompson said.
She outlined the fees Wal-Mart charges for different services, which break down in the following way:
Check cashing: $3.00 MoneyCard: $8.94 Money orders: 46 cents Domestic money transfer: $11.46 International money transfer: $9.46 Bill payment: 88 cents
The target demographic represents 20% of Wal-Mart 's customers, Thompson said, adding that providing people with a safe, friendly environment to handle these financial services was part of its mission.
“On the horizon is millions of cards and billions of loads,” she said. “And awareness is low, so our ability to grow [is strong].”
An estimated 2,200 bankers, acquirers, processors, vendors and retailers attended the annual, three-day Prepaid Expo, which was held at the Rio Hotel and Casino.