Considering Walmart spent the better part of a decade
Building on a service called
The new service gives Walmart a chance to cash in on the massive market for cross-border payments, fueled by an increasingly digital economy and global investments in using blockchain to reduce costs of international money movement.
"Walmart likes to be a 'bank' because there is a lot of room for profitability and to provide better service in that sector," said Larry Berlin, vice president with Chicago-based First Analysis Securities. "By offering these types of financial services, they are also looking for foot traffic and more sales in their stores."
It is becoming more common for a Walmart shoppers to go to the financial services section of a store and feel pretty much like they are in a bank branch.
"You'll see the MoneyGram services, you'll see the various prepaid card offerings, you'll see maybe a bank branch ATM and pitches for mobile payment applications, things like that," Berlin said. "They tried to be a bank and got turned down, and they have worked hard to get around that."
Walmart hit a wall in 2007 when trying to create its own bank, after its last bid made in 2005 ran up against the Federal Deposit Insurance Corp., which was going to delay its review of applications for what it referred to as "industrial loan corporations." What it really meant was that Congress, at that time, was seeking to keep retailers from owning banks.
Still, Walmart liked the notion of providing financial services for unbanked or underbanked customers — and it showed with a series of products and services that would appeal to that demographic. In addition to Walmart2Walmart, the company added a prepaid card money transfer service called
In promoting Walmart2World, the retailer said it will offer the same fees for any customer in the U.S. at $4 for sending up to $50; $8 to send from $51 to $1,000; and $16 to send $1,001 to $2,500.
Walmart is also assuring customers will receive a more competitive foreign exchange rate when transferring money through the service, as well as delivery within 10 minutes on the MoneyGram network. The money arrives in that time frame regardless of whether the recipient picks it up at a MoneyGram agent location, an international bank or through a mobile wallet account.
Customers using Walmart2World can also make money transfers through Mobile Express Money Services in the Walmart app after establishing a one-time setup of credentials. Users would initiate the money transfer through the app, then complete the transaction through the Mobile Express Lane at a store.
