Once upon a time, banks paid customers to hold their money.
That was a long time ago. Today, banks pay little interest and charge high monthly fees relative to the balances held by account holders. This change-in-tack corresponds to a time when having a bank account is increasingly more important as we move toward a cashless society.
Enter Wal-Mart and Amex’s introduction of the BlueBird service. There is probably more than some overlap between the unbanked and WalMart customers. It’s a natural business opportunity for Wal-Mart, and potentially immensely disruptive to banks.
Here is a short description of the service:
Using the retailer’s stores to promote and support the card, American Express is seeking to reach low-income customers with the service, which allows for cheque deposits and payments by smartphone and has no minimum balance or monthly fees.
The service, called Bluebird, is Walmart’s latest foray into financial services. As the retailer competes against encroaching
online rivals, the move could also help ensure customers keep visiting its stores, which will serve as Bluebird branches.
Dan Schulman, an American Express executive, said: “In an era where it is increasingly ‘expensive to be poor’, we have worked with Walmart to create a . . . product that rights many of the wrongs that plague the market today.” He said it was aimed at the “wide swath of consumers who are either unbanked, underbanked or unhappily banked”.