Payments

How Walmart’s money services compete with payday lenders and check cashers

  • Walmart customers can now carry out mobile-enabled money transfers in stores, an upgrade of its financial services offerings
  • Walmart is moving to keep customers in the retailer's stores rather than create a new financial services empire
close

Email a Friend

How Walmart’s money services compete with payday lenders and check cashers

While Walmart may not be a bank, its recent upgrade of in-store financial services may suggest it has broader aspirations than just low-priced consumer products.

Last week, the retailer began offering what it calls in-store Express Money Services in New Hampshire, West Virginia, Indiana and South Carolina, making it easier for consumers to carry out in-store money transfers. It’s a move that could stem the flow to payday lenders and check cashers.

“This is just a way for them to get lower-income people into the stores and continuing to attack the lower-income demographic that’s out of Amazon’s reach — it’s more of a defensive rather than an offensive strategy,” said Morningstar analyst John Brick.

Walmart has long offered money transfers, check printing and bill-pay services. But money transfers used to involve lengthy paperwork. The retailer announced on Thursday that customers can set up the money transfer at home through the Walmart mobile app, and pay a cashier the value of the money transfer in an express lane at the store. The retailer said it intends to expand the roster of financial services offered through the express-lane service, including bill payments and check cashing.

Walmart has attempted to move into financial services for over a decade, with a bid to buy Franklin Bank of California blocked in 2002 and a 2005 application for an industrial loan company charter (a banking license that lets a nonbank offer bank-type services) that was withdrawn two years later. Still, Brick said Walmart’s upgrade of its financial services offerings is more of a tactic to keep customers in the stores rather than to create a new financial services empire.

When asked if the recent upgrade is a sign of a bigger focus on financial services from Walmart, Brick said establishing a bigger presence online is likely to be a bigger priority over the next five years. A large-scale expansion of financial services offerings would only be foreseeable after the retailer has solidified its presence as an online retailer, he added.

One financial sector that may feel a pinch is payday lenders.

“When they enter our market, they’re the 10,000-pound gorilla,” said Jamie Fulmer, svp of public affairs at Advance America, one of the largest payday lenders in the U.S. “It’s clearly been on their radar screen; Walmart’s renewed interest [in financial services] is indicative of a realization that the consumer is redefining the financial mainstream.”

Despite the threat Walmart presents, Fulmer said the competition is good for the market and a win for consumers. “It becomes a competitive concern for us — we’ll do everything we can to compete with Walmart on quality and service,” he said. “We believe the marketplace is best served when the market has more providers for competing for business.”

0 comments on “How Walmart’s money services compete with payday lenders and check cashers”

Finance Everywhere, Payments

Google launches digital wallet: 5 questions with Payments GM Arnold Goldberg

  • Google launched its digital wallet and virtual cards at its latest I/O developer conference, marking its first move in the payments space since the Plex project was scraped late last year.
  • Tearsheet spoke with Google's head of payments, Arnold Goldberg, about what this means for the Big Tech's journey in financial services.
Iulia Ciutina | May 13, 2022
Member Exclusive, Payments

Payments Briefing: ‘We penetrated the blue ocean opportunity of the Spanish-speaking market’ – NovoPayment’s Anabel Perez

  • This week, we take a look at Miami-based BaaS provider, NovoPayment.
  • We also discuss Bumped, a firm that rewards customers with equity in the brands they shop from.
Ismail Umar | May 12, 2022
Payments, Podcasts

What’s Happening in Payments Ep. 6: Quontic’s payment ring, Visa’s move into NFTs, and the new Square Stand POS system

  • This week, we discuss why Quontic Bank decided to launch a contactless payment ring.
  • We also talk about Visa's recent crypto and NFT-related activities, as well as Block's upgraded Square Stand POS system.
Ismail Umar | May 05, 2022
Payments

Rewarding shoppers with brand ownership: Bumped expands with a new browser extension

  • Bumped runs a service that rewards customers with fractional ownership of partner brands that they shop from.
  • The firm’s new browser extension notifies online shoppers every time their purchase is eligible for a stock reward.
Subboh Jaffery | April 27, 2022
Member Exclusive, Payments

Payments Briefing: ‘We want to be the bank that got people into wearables’ – Quontic Bank’s Steve Schnall

  • This week, we discuss Quontic Bank’s new contactless payment ring.
  • We also take a look at Square’s upgraded Square Stand POS system.
Ismail Umar | April 25, 2022
More Articles