Wal-Mart, Amex take on banks with low-priced debit card
By Martinne Geller and David Henry
NEW YORK (Reuters) - Wal-Mart Stores Inc and American Express Co are teaming up to offer a prepaid debit card called Bluebird to target lower-income shoppers who may not have bank accounts.
The move will give American Express, best known for its affluent cardholders, 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.
At the same time, Walmart will get to extend its mantra of "every day low prices" to yet another sphere and come closer to achieving its years-long goal of offering banking services.
It also recently announced a deal with Metlife Inc to offer life insurance in a pilot program in South Carolina and Georgia.
"Walmart is doing everything it can to be a financial services provider to the largest number of Americans possible," said David Robertson, publisher of The Nilson Report, which tracks the payments industry.
The Bluebird, which will be available next week, offers something similar to a checking account, but without minimum balance requirements or monthly or annual fees. Adding money is free, unlike other cards, known as prepaid debit or reloadable cards. Bluebird cards will be accepted anywhere that accepts American Express cards, not just at Walmart.
"This is incredibly cheap. This is one of the best, if not the best, options for prepaid cards," said Anisha Sekar, vice president for credit and debit products at NerdWallet.com, which compares prices for financial products.
The average American pays about $200 a year in ATM fees, overdraft fees and other bank fees, said Daniel Eckert, Walmart's vice president of financial services. Continued...