Wal-Mart Canada Corp.'s debut banking product, a credit card, is the first product from the retailer's recently approved bank, a venture that promises to inject more competition into Canada's financial services industry.
The Wal-Mart Stores Inc. unit, which announced the Walmart Rewards MasterCard on Tuesday, applied for a banking license in September 2008 but did not receive final approval until a couple of weeks ago. Many of its competitors, such as Loblaw Cos. and Canadian Tire Corp., have operated banks for years.
Opposition caused Wal-Mart to put banking plans on hold in the U.S. in 2007, but it has operated a bank in Mexico since 2008.
Consumer groups like the Consumers Association of Canada have called Canada's banking sector "one of the least competitive" in the world. Canada's Office of the Superintendent of Financial Institutions regulates 22 domestic banks and 26 foreign banks, but the market is dominated by a handful of banks known as "the big five."
Wal-Mart's card offers cardholders rewards points that can be redeemed for products sold at Wal-Mart.
Trudy Fahie, the president and chief executive of Walmart Canada Bank, said the card carries a "very favorable" interest rate of 18.99% and no annual fee.
Fahie, who was hired from American Express Co.'s Canadian unit four years ago, said the retailer is slowly developing its financial services strategy and plans to unveil additional products and services eventually, but she would not elaborate.
