Wal-Mart pushes further into financial services with mobile checking (+video)
Wal-Mart is introducing a mobile checking account for its customers that will eliminate the overdraft and bounced-check fees traditionally charged by banks. It is Wal-Mart's biggest push into the financial services sector, targeting customers that have limited access to traditional banking.
Pasadena, Calif. — Wal-Mart is introducing a mobile checking account for its customers that will eliminate the overdraft and bounced-check fees traditionally charged by banks.
It is Wal-Mart's biggest push into the financial services sector and its target is customers that have limited access to traditional banking.
The company's GoBank checking has no minimum balance requirements and the monthly fee of $8.95 is waived if a direct deposit of $500 is made each month.
Clearing the way for people with poor credit scores and little money, Wal-Mart said Wednesday that credit bureau ratings and other scores typically used to determine eligibility are not part of the process.
Daniel Eckert, senior vice president of services for Walmart U.S., said that the retailer's customers "feel they just aren't getting value from traditional banking because of high fees."
Wal-Mart is reaching for Americans who have suffered in the wake of the recession. Many of those people are the retailer's core customers.
The Census Bureau said last week that median household incomes were $51,939 in 2013. Adjusting for inflation, that's 8 percent lower than in 2007, when the recession began.
Increasingly meager paychecks have forced many Americans just getting by to pay fees for the same basic transactions that people with more money do not.
Customers can receive payroll direct deposit earlier than their normal payday if their employer notifies GoBank of a deposit in advance.
GoBank checking accounts offer additional services to aid in budgeting. The account notifies customers in real time if a purchase they are about to make falls outside of their budget.
The "Fortune Teller" feature crosschecks the price of a particular item against a customer's planned income and other expenses.
In addition, customers can send money instantly to each other at no charge through either email or a text message.
"The checking account, from Green Dot Bank, Member FDIC, is designed for today's "on-the-go" customer, providing a host of modern features and a linked MasterCard debit card." Walmart and GreenDot said in a press release. "GoBank doesn’t charge overdraft fees, minimum balance fees or monthly fees with qualifying direct deposits. The product will be available nationwide by the end of October."
“Many so-called ‘free’ checking accounts aren’t really free because they have high overdraft fees. In fact, an independent study by Bretton Woods estimates that consumers pay approximately $218 - $314 per year for a basic checking account,” said Steve Streit, founder and CEO of Green Dot Corporation and chairman of Green Dot Bank, in the release. “No other checking account makes it this easy and affordable to manage your everyday finances. GoBank is breaking down the barriers to traditional banking and brings the benefits of a FDIC-insured checking account that’s loaded with features to a large segment of Americans.”
GoBank, a full-featured checking account, is offered as part of Walmart’s checking alternatives category.
“Walmart customers want easier ways to manage their everyday finances and increasingly feel they just aren’t getting value from traditional banking because of high fees,” said Daniel Eckert, senior vice president of services for Walmart U.S, “ said in a statement. "Adding the GoBank checking account to our shelves means our customers will have exclusive access to one of the most affordable, inclusive and easy-to-use checking accounts in the industry. GoBank gives our customers yet another option as to how they manage their money. When our customers have options, they win.”
Wal-Mart Stores Inc., based in Bentonville, Arkansas, is operating the new account through Green Dot Corp.'s federally insured Green Dot Bank. The retailer already offers prepaid cards through Green Dot.
A MasterCard debit card can be linked to the GoBank account, which can be set up with a starter kit that costs $2.95. There is a 3 percent transaction fee for using an ATM that is out of network.
GoBank is exclusive to Wal-Mart, which will have it available at its stores nationwide by the end of October. The company has more than 11,000 stores in 27 countries.