Walmart looking to lure banking customers
Would you bank at a Walmart? The latest move by America's retail giant to automate its MoneyCenter offices could provide just the combination of convenience and low fees to lure some customers away from traditional banking.
It became a little more difficult to tell the difference between a bank lobby and a Walmart at certain stores this month as the world's largest retailer rolled out new, automated versions of its MoneyCenter offices to unspecified locations that don't have the fully staffed version.
Walmart Financial Services President Jane Thompson said the pilot program, which she dubbed "MoneyCenter in a box," will feature a Walmart version of an ATM machine.
That might seem like a pretty tame move from a company whose more than 1,000 MoneyCenters throughout the country already provide check cashing, bill payment, wire transfers and other services and rank among its top profit areas. But Brian Riley, a research director at TowerGroup, says looks can be deceiving.
"Retailers should shake in their boots, banks should shake in their boots," Riley says. "Because if Walmart starts linking their kiosks to doing reloadable gift cards, they have the power to move a lot of transaction money."
Kiosks, you see, are all the rage in consumer finance circles these days because they have the potential to combine 24-hour banking with online purchasing and financial services (i.e., loans), without the overhead of staffing.
Combine that with Walmart's ability to sell you a reloadable gift card on the spot and, for some consumers, a wallet full of plastic no longer seems like a prerequisite to the American dream.
Javelin Strategy and Research president James Van Dyke ran out this scenario for American Banker: "If you take a Walmart shopper, if maybe they want to buy a washing machine and they want to transfer funds online without having to get to their home computer, or maybe they don't have easy Internet access, they can do that now within a Walmart. It makes a lot of sense for a limited segment of the population."
Combine that cross-functionality with the windfall that Walmart stands to gain when debit card fee caps take effect as part of financial reform and I wouldn't be overly surprised to see the retail giant take another run at the bank charter they flirted with four years ago.
First National Bank of Walmart? It could still happen.
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