Wal-Mart Entering Into Financial Services Market
Posted on June 20, 2007
Wal-Mart (WMT) announced they will be entering into financial and banking services market in an effort to “help Americans save money and live better.” They will be offering check cashing, money orders, bill payment and money transfers in addition to a Wal-Mart MoneyCard. The MoneyCard, a reloadable and prepaid VISA card, functions similar to a checking account in that an entire paycheck can be deposited into it, bills can be paid from it, and purchases can be made. The significance of the announcement is this appears it could be the first step for Wal-Mart venturing further into financial services and then into consumer lending to include home equity loans and mortgages. Should Wal-Mart enter the lending business it could be a force overnight, potentially driving prices lower as reported in the NY Times. In hearing of Wal-Mart’s news release, I can’t help but reflect on Elizabeth Warren’s quote from Maxed Out (paraphrasing) “consumer lending is obscenely profitable.” By offering financial services Wal-Mart would instantly have access to a customer base that borrows significant amounts of money every year, and would jump at a product that would save money on interest as well as provide convenience.
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3 Responses to “Wal-Mart Entering Into Financial Services Market”
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Dear Wal-Mart:
What we need is affordable housing; home equity loans are completely useless to us!
Minimum Wage:
I completely agree with the need for affordable housing. Living in Orlando, Florida over the last 15 years our cost of living has significantly increased and continues to do so. It’s not as bad as other places (NYC, Miami, LA) but it has the potential to do so. Luckily we have been getting more employeers moving into the area paying realistic salaries.
This is great news! It gives them a way to save Americans more money! I hope it drives the prices of banking industry way down!