Monday, March 20, 2006

Wal-Mart to put the Squeeze on Banks

Wal-Mart is making noises about entering the banking business and it has banks upset.

They've never complained before about Wal-Mart's predatory pricing tactics.

Wal-Mart customer's average incomes are below the national average...Some analysts estimate that more than one-fifth of Wal-Mart's customers have no bank accounts, which would be about twice the national rate, according to the Federal Reserve. "Wal-Mart National Bank" could bring these customers into the banking fold, offering them affordable bank accounts, credit cards and mortgage loans.

"It could turn out to be a good thing for consumers," said consumer advocate Linda Sherry, editorial director for Consumer Action, "especially the unbanked or those who are suspicious of banks."

It's a pretty big market and one that Wal-Mart has already started to tap. The retailer began offering money orders three years ago and has since added payroll check-cashing and money-transfer services. Today, the company's 3,066 stores and supercenters process about a million financial transactions a week.|MSN Money|
It will be interesting to see how this plays out...it's hard to have too much sympathy for bankers.

The Wall Street Journal has additional coverage, if you have a subscription.

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