Wal-Mart Stores Inc. has plans to expand its financial-services products in a bid to serve the underbanked and to develop customer loyalty.
"Five years ago we were selling a money order," Jane Thompson, president of Wal-Mart Financial Services, told attendees at SourceMedia's third annual Underbanked Financial Services Forum in Miami last week.
Now it also offers check cashing, direct funds transfers and a prepaid card, and it has built MoneyCenters in its stores to offer those services all in one place, Thompson said. The company also has an agreement to offer bill-payment services with CheckFree Pay.
Wal-Mart has offered the prepaid Visa-branded Wal-Mart MoneyCard for about one year. It has sold 1 million cards since then and has loaded more than $1 billion on those cards, Thompson said.
GE Money issues the card. GE Money is a division of the General Electric Co., and it is based in London. It offers private-label credit cards, personal loans, bank cards, mortgages, debt consolidation and credit insurance in 50 countries.
The Wal-Mart MoneyCard sells for $8.94 in stores, carries a monthly maintenance fee of $4.94, and consumers can reloaded it for $4.64, according to a Wal-Mart Fact sheet. Wal-Mart's money orders cost 46 cents, and check cashing costs $3 per check, according to Thompson.
In a separate talk at the conference, Will Sowell, GE Money vice president of retail consumer products, said Wal-Mart has focused on keeping costs low.
"Wal-Mart has driven us to drive down pricing as much as we can," Sowell said.
When consumers load at least $1,000 on the MoneyCard, Wal-Mart waives the fee for the following month. The retailer also waives reload fees if customers use direct deposit or load funds from a check cashed at Wal-Mart, according to the fact sheet.
Wal-Mart cashes economic-stimulus checks for free, Thompson said. If consumers load the funds onto a Wal-Mart MoneyCard, the company waives the purchase fee, he says. Wal-Mart ads promoted those services during the season finales of such television shows as American Idol, Lost and Extreme Make Over, Thompson said.
To expand offers to underbanked customers, Wal-Mart, which is based on Bentonville, Ark., plans to increase the number of MoneyCenters in its stores where consumers can go to buy money orders, wire funds and cash checks, Thompson said.
The company reached 500 centers with the opening of its latest in Mississippi last week, she says. The company plans to open 780 by year's end and 1,000 by early next year, Thompson said.
Wal-Mart will not put a Money Center is every store, she said.
"We don't always have the space," Thompson said of putting MoneyCenters in Wal-Mart stores. "A lot of times, the Supercenter is filled."
Wal-Mart also offers online bill payment for prepaid card customers and has begun to roll out bill payment at the stores, Thompson said.
Wal-Mart offers CheckFree Corp.'s bill-payment services in 400 stores and plans to roll the service out to 3,600 stores over the next 90 days, she told Prepaid Trends after her presentation.
Based in Wallingford, Conn., CheckFree accepts bill payments from consumers at more than 12,000 locations nationwide. Checkfree is owned by Fiserv Inc., which is based in Brookfield, Wis.
During the question-and-answer portion of her presentation, Thompson said Wal-Mart does not plan to pursue a bank charter but instead intends to seek partners to help it offer expanded financial services, including savings products.