The Wal-Mart Checking Account

Wal-Mart strikes again! We knew Wal-Mart was big, and we know they've formed similar allegiances in the past, but we didn't see this coming...

In an effort to expand its customer base in an unconventional and innovative manner, American Express has joined forces with Wal-Mart's ever-growing 'empire' to offer customers some very unique services when it comes to banking and shopping...

According to the Associated Press, Wal-Mart Inc. and American Express will offer a brand new prepaid card that will give shoppers more freedom and control when it comes to their daily finances. The two companies announced their plans Monday, Oct. 8, 2012.

They call the card “Bluebird”and say it will act very similar to a checking account, sans all those pesky fees that have become insufferably frustrating for consumers. It will have no annual or overdraft fees and will not require a minimum balance for usage. Any potential fees associated with the Bluebird will be “transparent” and under the user's control; not controlled directly by the fleeting whims and insatiable greed of the big banks.

This new card exemplifies how fiercely pre-paid card competition is heating up – once the domain of non-bank companies. It resonates beyond the banking sector and proves how companies are capitalizing on new consumer demands in today's uncertain economy where millions of people are taking their money out of banks completely. 

Generally, prepaid cards are not linked to a checking account at all. Although these cards are targeted at people who don't have bank accounts – roughly 17 million Americans – or those who have poor credit ratings, they are becoming increasingly popular for mainstream consumers who have lost faith in the big banks and do not want to pay the steep fees.

In this case, the Bluebird is a result of a pilot program that take place late last year. In response to the pilot-trial, Wal-Mart and American Express used consumer feedback to improve the Bluebird. Consumers surveyed said “were bothered by rising fees related to checking accounts and debit services.”

From the Associated Press in New York:

"We are recreating and reimagining what checking and banking services might look like in the 21st century," said Dan Schulman, group president, Enterprise Growth at American Express in an interview with The Associated Press. He said the partnership with Wal-Mart, the world's largest retailer, aims to set up a "moral equivalent of a bank branch at retail."

"Our customers tell us that they're tired of navigating a complex maze of do's and don'ts to avoid the ever growing list of fees found on checking products," Daniel Eckert, vice president of financial services for Walmart U.S., said in a statement.

For those of you familiar with Wal-Mart's pre-existing prepaid cards from Green Dot Corp., you know the concept is not a new one for Wal-Mart. For any of you currently affected by this, please note that Wal-Mart has indicated no plans to end its relationship with Green Dot in the aftermath of their recent partnership with American Express. Currently, Green Dot relies on Wal-Mart for approximately 60 percent of its revenue.

Here's how the stock market responded to Monday's Bluebird announcement:

Shares of Bentonville, Ark.-based Wal-Mart added 13 cents to close Monday trading at $75.26. Shares of American Express, which is based in New York, gained 22 cents to end at $58.78.

Green Dot shares dropped fell $2.618, or 20.3 percent, to close at $10.24.

But no worries, Wal-Mart won't be severing any ties anytime soon, it is merely “broadening its assortment of financial services to serve more customers.”

As early as next week, Bluebird cards will be available for consumers at large at over 4,000 Wal-Mart stores nationwide. They will also be available at www.bluebird.com.

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