Walmart Banks on Bluebird to Reach the Unbanked
Even people with the least amount of money may be taking a techie approach to shopping in the future if Walmart and American Express have anything to say about it.
Walmart hopes to convert unbanked customers to a prepaid debit card, dubbed "Bluebird," in efforts to gain share of the demographic. Bluebird is touted as an alternative for consumers turned off by increasingly higher fees.
"Our customers tell us that they’re tired of navigating a complex maze of dos and don’ts to avoid the ever growing list of fees found on checking products," said Daniel Eckert, vice president of financial services for Walmart U.S., in a statement. "Bluebird solves this problem and we believe it’s the best product on the market to help customers affordably manage their everyday finances. At Walmart, we are always looking for ways to make a difference by using the strengths that come with our size, scale and reach to take on the challenges that matter most to our customers. Reducing the costs and frustration that come with high fees is one of these issues."
Bluebird doesn’t require a minimum balance or impose fees although it charges fees for services like out-of-network ATM use. Walmart’s existing MoneyCard prepaid card, run by the company Green Dot, costs $3 to buy, $3 a month and $3 to reload.
With Bluebird, money can be added for free and the cards will be accepted anywhere that takes American Express. Payroll direct deposits and smartphone deposits of photographed checks are accepted while holders can make mobile payments, do automatic bill pay and person-to-person transfers, according to Business Week.
Reuters adds, "American Express, best known for its affluent cardholders," would gain "a 4,000-store gateway to tens of millions of so-called ‘underbanked’ households and the fees they will generate as technology moves more of their transactions from cash to digital payments."
Reuters says David Robertson, publisher of The Nilson Report, which tracks the payments industry, believes "Walmart is doing everything it can to be a financial services provider to the largest number of Americans possible. … A surprising number of underbanked consumers have a smartphone they can use with a prepaid account to make purchases."
Forbes noted that although the FDIC finds 28.3 percent of all U.S. households conduct "some or all of their financial transactions outside of the mainstream banking system," FDIC and Consumer Reports have recently warned consumers about the dangers of prepaid cards since they’re largely unregulated and have fewer consumer protections.
- American Express and Walmart Launch Bluebird: a New Alternative to Debit and Checking Accounts – Walmart Stores
- Wal-Mart, Amex take on banks with low-priced debit card – Reuters
- Walmart targets unhappy bank customers with new prepaid card – should banks be nervous? – Forbes
Is Bluebird a bankable opportunity for Walmart? Do you think prepaid debit cards will play a more important role in the future of payments at retail? Do you see other retailers following Walmart’s lead in offering financial services to the unbanked?