BENTONVILLE, Ark. -
At least one analysis of the pricing of that product, by CUNA, suggests users will be paying higher fees than they would had they obtained a similar product elsewhere.
As reported in the Credit Union Journal June 25, Wal-Mart Store Inc.'s plans to open 1,000 MoneyCenters by the end of 2008. As part of that rollout, it has introduced a reloadable prepaid Visa card aimed at the millions of customers, many of whom would qualify as "underserved," who visit Wal-Mart stores each week, according to Jane Thompson, president of Wal-Mart financial services..
"Many of our customers are paying too much, traveling too far and not being well-served," she said. "But they still need to pay their bills, cash their checks and transfer money. We're offering them a safe place and a card to help them manage their money."
The Wal-Mart MoneyCard
The Wal-Mart MoneyCard-issued by GE Money Bank-was rolled out to about 1,300 Wal-Mart stores throughout June, and another 1,300 in July. By the end of the year, it is expected to be available at most Wal-Mart stores. At present there are 225 Wal-Mart MoneyCenters. That number is expected to double to 450 by the end of 2007, and then double again to 1,000 by the end of 2008.
The MoneyCard, which does not require a credit check, bank account or any commitment, has an issuance fee of $8.94. There is a monthly maintenance fee of $4.94, but customers who load $1,000 or more within a calendar month will not be charged that fee. There is also a $4.64 reload fee, which is waived if customers load funds from a check-cashing transaction at Wal-Mart directly onto a Wal-Mart MoneyCard or have funds loaded via direct deposit.
"There should be little doubt that this product is aimed at driving fee income for its issuer," said Pat Keefe, CUNA's vice president of communications and media outreach.
Keefe said that for the low-dollar user of this card-under $1,000 a month-who does not or cannot take advance of direct deposit serves, the published fees will be at least $9.58 each month.
"Further, while users will be able to use these cards at ATMs, they will pay 75 cents for balance inquiries, and $1.95 in transaction fees," Keefe added. "It is highly likely that those who will ultimately pay these fees are low-income persons in underserved areas-that is, those who can least afford to pay."
Keefe said that only 11% of credit unions which own their ATMs charge their members a fee to use the machine.
Some Fees Are Charged
"If a transaction is made at a non-CU owned ATM, 75% of credit unions charge a fee-but only after about the fifth transaction each month. Further, if/when a fee is charge, the average is $1.09," Keefe said. "In short, the people most likely to use this service would be much better off using a credit union to obtain the same results."
Other financial services being offered by Wal-Mart MoneyCenters include: cashing of payroll and government checks at all registers for $3, money orders for 46 cents, domestic money transfers for $11.46 for amounts up to $200 and international money transfers for $9.46 for amounts up to $1,000, bill-payment services with fees ranging from $5.50 to $9.50 per transaction, utility bill payments for cost of 66 cents each, and credit reports for about $10 each.
Keefe noted that Wal-Mart's expansion to reach such customers is why the trade group is placing such emphasis on the Credit Union Regulatory Improvements Act (HR 1537), which would allow all types of credit unions to provide services to persons in underserved areas.
