Walmart Continues Acting Like A Bank, Now Offering Low-Fee Checking Accounts

(Ron Dauphin)

It appears that Walmart is taking consumers’ willingness to do their banking outside of traditional banks to heart. The mega-retailer unveiled plans today that would put low-cost checking accounts into the hands of just about any consumer across the country.

The New York Times reports that Walmart teamed up with Green Dot, a company known for issuing prepaid credit cards, to provide checking accounts to anyone over the age of 18 who can pass an ID check.

The new GoBank service, which is expected to be available by the end of October, is intended to be a low-cost alternative to traditional bank checking accounts.

While the accounts will cost $8.95 per month for consumers who have direct deposits totaling less than $500 a month, they are missing the most costly elements of typical checking accounts. In fact, that accounts won’t have fees for overdrafts or bounced checks, and no minimum account balance is required.

Not charging fees is a stark contrast from the bank branches currently operating inside Walmart’s retail stores. A study earlier this year found that while the average U.S. bank only gets about 0.7% of its revenue from fees charged to customers, banks inside Walmart stores average anywhere from 11.3% to 20% of their revenue from fees.

Additionally, typical checking accounts cost consumers on average $225 a year in overdraft fees, a report from the Consumer Financial Protection Bureau found last year.

Of course this isn’t Walmart’s first foray into the financial services industry.

Back in April the company announced Walmart-2-Walmart, a money transfer program that allows customers to send funds to and from nearly 4,000 stores nationwide.

Before that, in 2012, Walmart partnered with American Express to offer consumers a prepaid debit card alternative called Bluebird. While the card came with few fees, it could only be used at stores that accepted American Express.

Walmart Prepares to Offer Low-Cost Checking Accounts [The New York Times]

by Ashlee Kieler via Consumerist