Plenty of businesses hate and fear Walmart, that giant corporation that outsells and out-prices everyone else. But did you know that banks are increasingly feeling nervous about Walmart as well?
The reason is Walmart’s MoneyCenter offices, which offer a range of financial products including check cashing, bill payment, wire transfers and other services. Manned by customer service agents, they are one of the most profitable areas in Wal-Mart stores, Thompson said. There are over 1,000 of these MoneyCenters in Walmarts everywhere, and they are one of the most profitable areas in the Walmart store, according to Jane Thompson, the outgoing president of Wal-Mart’s financial services unit.
In a new move, Walmart will begin this month rolling out automated versions of its MoneyCenter offices. The “MoneyCenter in a box” concept will feature ATM-like machines positioned in Wal-Mart stores that do not have full MoneyCenters, said Thompson.
Though the move might seem less ambitious than Wal-Mart’s other forays in banking, competitors should take it seriously.
“Retailers should shake in their boots, banks should shake in their boots,” said Brian Riley, a research director in the bank cards practice at TowerGroup. “Because if Wal-Mart starts linking their kiosks to doing reloadable gift cards, they have the power to move a lot of transaction money.”
Thompson would not say exactly how many express MoneyCenters will be part of the pilot program, and was reluctant to reveal locations to rivals.
“It’s going to be kind of like ‘Where’s Waldo’ — you’ll have to find them,” Thompson said during the 6th Annual Underbanked Financial Services Forum in New Orleans held by American Banker and the Center for Financial Services Innovation.
Keeping Costs Down
Many financial services companies have been trying to encourage self-service transactions at kiosks or ATMs in order to keep labor costs down and maximize store hours, so to speak.
“If you take a Wal-Mart shopper, if maybe they want to buy a washing machine and they want to transfer funds online without having to get to their home computer, or maybe they don’t have easy Internet access, they can do that now within a Wal-Mart,” said James Van Dyke, the president of Javelin Strategy and Research. “It makes a lot of sense for a limited segment of the population.”
Walmart has campaigned for years for cheaper banking services and even applied in 2007 to charter an actual bank, though it scrapped that application in the face of tremendous industry opposition. Today Wal-Mart is one of the top sellers of prepaid cards, through a partnership with General Electric Co.’s GE Money and Green Dot Corp.
I admit that I’ve never tried any of Walmart’s financial services, though I have noticed that the MoneyCenter at my local Walmart is always busy. Nor have I tried the new kiosks. Maybe I’ll take a trial run, so I can write a review here.