Bankless Wal-Mart Seeks ‘Unbanked’ Consumers

DAN ALAIMO

BENTONVILLE, Ark. — In contrast to its recent moves to attract a more upscale clientele, Wal-Mart Stores will aggressively roll out a financial services program aimed primarily at lower-income customers. The announcement this week that it will install 1,000 MoneyCenter departments and offer a co-branded prepaid debit card follows the company's withdrawal in March of its application to create a banking entity. At the time, Wal-Mart had said that it wanted the bank to process credit and debit card interchange fees, but all its moves since then have been aimed at the consumer banking market. This shows the company’s “true colors,” said Ron Ence, vice president, congressional relations, Independent Community Bankers of America, Washington. “What they want to do is cherry-pick some of the customers that traditional banks have and capture a portion of their traditional market.” Wal-Mart’s financial offerings seek to meet the needs of the “unbanked” and “underbanked,” said Jane Thompson, president, Wal-Mart Financial Services. “We think this is groundbreaking and a game-changer in the industry, and also a life-changer for many of these customers,” she said. This approach reflects Wal-Mart’s heritage of going after populations other retailers ignored, said Art Turock, sales growth strategist, Art Turock & Associates, Kirkland, Wash. “This is more typical of Wal-Mart, trying to find some less or minimally contested customer segments, and the unbanked and underbanked fit that designation quite well,” he said. “Most banks and financial institutions don’t really target this type of customer,” Turock said.

Read More of Today's Headlines