OK, so if it looks like a bank, walks like a bank, and quacks like a bank, is it a bank? With the Wal-Mart, you never know.
We got these new Wal-Mart MoneyCards at our store this weekend -- and they're insidious. They parked a huge display at the main door -- immediately as you enter the store by Register 1 -- and small displays in front of every Customer Service register.
Also, and this is what customers find the most annoying - there is a prompt after cashing EVERY paycheck - "Would you like to load your check onto a Wal-Mart Moneycard?" That's right - every cashed paycheck. Every time. All day I had to keep telling people "Do you want a MoneyCard? Then hit NO."
Don't know what a MoneyCard is? Here's an article from the Chicago Tribune. And here is the MoneyCard Web site.
Basically, it is Wal-Mart's way around the law's preventing them from opening up a bank. The cards work almost EXACTLY like the pre-paid credit cards that people with crap credit get.
You have to load money ONTO the card before you can spend. But it looks and acts more like a debit card. You can use it a places that accept Visa - and for online shopping - and at ATMs.
when your balance is low, you can add more money at any Wal-Mart store - either by cashing your paycheck (free, except for the $3 check cashing fee) or by paying a $4.64 fee every time you want to deposit money into the account. Yes - pay just to use YOUR money!
Every time you visit an ATM, it is $1.95 to get cash. A balance inquiry will cost you seventy-five cents. Just having the card costs you $4.94 a month. Here's the full schedule of fees.
Who is the market for this? People who can't even get Wal-Mart's regular credit card - and people without access to the regular U.S. banking system.
Wal-Mart can shout to the high-heavens all they want about capturing the "high-end" segment of the market with cleaner stores, trendy merchandise and faux-couture fashion. Call a spade a spade.
Wal-Mart took a long, hard look at the numbers. And the money. Wal-Mart's money services are raking in the cash - and there is no "supply chain," "product chain" or "merchandise management" issue there. It is just cash and digital cash. There's money to be made in money.
Ask yourself -- "Who deals mainly in cash?" The polite way to phrase this is "people without access to the regular U.S. banking system." The impolite way is "the bottom rungs of society." As we move more and more toward a digital future, even these people need access to SOME sort of digital form of their money -- and really, it is safer than carrying around $3,000 in your back pocket.
I think this is going to take a while to take off - but it is eventually going to be huge.