Can The Retail Store Replace The Bank?
By Hannah Ash, contributing writer
Walmart, American Express Offer Customers Bank-Inspired Services
This week American Express announced it will bring Serve, its prepaid reloadable cards to 4,100 Walmart centers around the country. These cards, which are attached to full-service prepaid accounts, are another way for the financial services provider to capture an active consumer market. In 2012, American Express began offering its sister card Bluebird in Walmart stores around the country. Both cards allow customers to pay bills online, sign up for direct deposit, and transfer money. Similar to making a deposit at a bank, consumers can reload their cards at select retailers around the country.
Access to financial services is leaving the bank and entering the retail store. Dan Schulman, group president of enterprise growth with American Express, comments that as more than 1,800 bank branches have closed in the last few years, the need for greater access is substantial. As American Express takes steps to offer American consumers greater access to online financial processing without large fees through the retail store format, stores such as Walmart and CVS (both of which carry prepaid cards and are often open 24 hours) are poised to become more relevant in the context of American banking. For example, this month Walmart also launched a new ‘Walmart-2-Walmart’ money transfer service that affords consumers the opportunity to transfer money between all Walmart centers in the United States and Puerto Rico.
According to stats released by the FDIC in May 2013, a staggering 1 in 4 Americans is financially underserved. According to FDIC chairman Martin Gruenberg, “One in four households in the United States is either unbanked or underbanked.” These new initiatives from Walmart and American Express clearly strive to capture the 25 percent of the population that stands to benefit from improved access to key financial services. American Express sees the potential for growth, with Schulman commenting, “I think we are entering the era of the nonbank — consumers have all the power of a bank branch in the palm of their hand. Technology will redefine the world of consumer retail banking.”
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