Tuesday, April 22, 2014
Walmart Will Enter Cash Wiring Business
In a move that threatens to upend another piece of the financial services industry, Walmart, the country’s largest retailer, announced on Thursday that it would allow customers to make store-to-store money transfers within the United States at cut-rate fees.
This latest offer, aimed largely at lower-income shoppers who often rely on places like check-cashing stores for simple transactions, represents another effort by the giant retailer to carve out a space in territory that once belonged exclusively to traditional banks.
In this instance, competitors like longtime wire-transfer companies were the immediate target: MoneyGram’s stock fell more than 17 percent on the news; Western Union’s went down about 5 percent.
Walmart has become a big player in alternative financial products, especially those that cater to people with little or no access to banks, like prepaid debit cards, check cashing and now, the new cash transfer program, called “Walmart-2-Walmart.”
(This can be a good alternative for PayPal too. PayPal charges $27 to transfer $900 but with Walmart-to-Walmart, you can send $900 for just $9!)