Want to do your banking at Walmart? It may soon be possible. The mega retail chain is working towards offering checking accounts and other financial services to its employees and customers.
Tens of millions of Americans are “unbanked,” meaning they don’t have a checking account or other bank account. This leaves them scrambling to cash checks at bodega, currency exchanges and so forth, often for a hefty fee. Even worse, it leaves them at the mercy of predatory payday loans when they need a few dollars til the end of the month.
There are proposals floating around that would get the U.S. Postal Service into the banking business but their fate is questionable at best.
It would make a lot of sense for Walmart to offer banking services, partly for the reasons for which it’s always criticized or caricatured — its employees don’t make much money and it has a large percentage of low-income customers.
Those are exactly the people who need checking and savings accounts. Many employers help their workers set up non-profit credit unions, which provide banking services, but this might be a little too lefty for Walmart’s tastes.
So, according to a Bloomberg report, Walmart has been throwing its support (and money) behind a start-up that has announced it would acquire One Finance Inc., which operates a digital banking account, and fellow fintech Even Responsible Finance Inc., which provides workers with early access to their wages.
Walmart has long been trying to find a way into the financial services business. Its MoneyCenter locations already allow customers to cash checks, access tax-preparation services and send money overseas through partners such as MoneyGram International Inc. and Euronet Worldwide Inc.’s Ria.
It also already offers credit and prepaid debit cards through lenders including Capital One Financial Corp.
Digitizing the business
Walmart executives apparently see all of this as an opportunity to bring many of those financial services in-house and use them as a way to “get closer,” as they say in marketing circles, to their customers.
“We’ve got a pretty big financial services business, but I would characterize it as being analog, and the opportunity to make it digital is right there in front of us,” Walmart Chief Executive Officer Doug McMillon said last year at an investor conference, according to Bloomberg. “There are so many digital products that we can go build that will help people with managing their family’s expenses and their accounts and ultimately, hopefully, build wealth.”
It may or may not happen. Walmart has been on the brink of jumping into banking before but has always pulled back. If it can bring the same bottom-line focus to financial services as it does to diapers and tires, it might be a Great Leap Forward for cash-strapped consumers.