Wal-Mart may have failed in its attempt to open its own industrial bank, but that is not stopping the retailer from offering many of the same types of services offered through financial institutions.
The chain is expected to announce today that it is expanding the financial services its offers past check cashing, money orders, transfers and express bill payments to others, such as mortgages, home equity lines of credit and discount stock trading. It will also launch the Wal-Mart MoneyCard, a prepaid, reloadable Visa card.
Today, Wal-Mart offers financial services at MoneyCenters in 225 stores. The chain intends to bring that number up to 1,000 by the end of next year.
According to a report by MarketWatch's Jennifer Waters, "More financial services themselves aren't likely to bloat the top line, but the additional foot traffic that they would create could and certainly would benefit same-store sales results."
Wal-Mart is one of a growing number of large retailers looking to cash in on financial services. Just last week, for example, Kroger launched a website (www.krogerpersonalfinance.com) where consumers can obtain mortgages, home equity loans, gift cards, pet insurance and other products.
Gary Huddleston, director of consumer affairs for Kroger, told The Dallas Morning News, that the company's current financial services can be traced back to chain's offering of a co-branded credit card. "Once we introduced that [about three years ago], it seemed like a natural progression to get into other services like mortgages, home loans and the pet insurance."
Discussion Question: What do you make of the increasing number of retail chains looking to expand into financial services?