Photo courtesy of Mike Mozart via Flickr.
Feelings around Walmart and banks are often times strong ones. So now that two of America’s favorite/least favorite things are combining at last, one has to ask: Will this be a glorious union, a most unholy monster, or somewhere in between?
Here’s what you should know in 90 seconds about Walmart’s simultaneously exciting and terrifying venture into finance, not yet referred to as “Wal-Bank.”
1. The program, called GoBank, will offer checking accounts for $8.95 a month.
Made exclusive to select Walmart stores through a partnership with the bank Green Dot, GoBank will roll out starter checking accounts at Walmart, targeting lower-income Americans.
Unlike traditional banks, the accounts will have no overdraft fees or minimum balance requirements. Bank accounts will be $2.95 to open, mobile friendly, have monthly fees waived with a qualifying $500 direct deposit, and be free to use at GoBank ATMs.
Bill pay, person-to-person payments, money management tools, and more will also be available.
2. The bank will cater to America’s 10 million unbanked households.[contextly_auto_sidebar id=”bLexUckOBdmxTlDgx99TdoyxNyLuikTA”]Currently, the U.S. has 10 million unbanked households and growing — a market that Walmart hopes to capitalize on with GoBank. In theory, offering financial services to lower-income Americans will increase foot traffic to Walmart stores, where they will be more likely to shop at the super store.
Since Walmart has seen drops in profit this year coinciding with food stamp cuts, the potential of incentivising their store traffic is huge. GoBank also will give Walmart access to customer information, says the Guardian, data they can use to improve their inventory.
3. Banking has been a dream of Walmart’s for some time now.
Walmart has had its eye on the wonderful world of finance for decades. To Walmart’s continuous disappointment, it has been held back from the ultimate prize of a U.S. bank charter by the banking industry and others.
Despite this huge setback, Walmart has managed to gradually wedge its way into the industry, starting with the creation of “money centers” that offered prepaid credit cards. Their newest partnership endeavor is similar — no charter required.
4. Needless to say, not everyone is keen on Walmart’s newest financial debut.
The reaction to Walmart’s banking plans has been varied, with some believing it to be a corporate force of good, even if a self-interested one, while are others wary off of the intentions behind pulling revenue out of the country’s dependent class.
Another unanswered question is whether consumer protection laws, data security mandates and regulatory oversight will apply. While traditional banks are unlikely to be threatened, this could become a model for other retailers.
Others are asking if it would make more sense, and appear less sinister to reach the unbanked through post offices — and if so, why not?
Though GoBank may outshine traditional banking deals, Yahoo points out that there are other free checking accounts available already that do the same thing, or better.
5. It’ll be available at the end of October
Many people will be watching Walmart closely to see whether GoBank is more of a Let’s-Go-Bank or a Go-Away-Bank.
Though the relationship between Walmart and its consumers in regards to their dive into banking is worthy of scrutiny, if it works well in favor of consumers, it could be a win-win for both Walmart and families in need of financial assistance — and who can have beef with that?
The “Bank of Walmart,” GoBank, will go national at the end of October, 2014.