Retailing giant Wal-Mart (WMT) may be pulling American Express (AXP) prepaid cards from its shelves due to poor sales, according to an analyst report from Jefferies & Co.
The AmEx cards, branded under the name "bluebird," were sold at 180 Wal-Mart stores on the West Coast starting last fall, as part of a pilot program. The credit card company also launched a prepaid card program at Target late last year.
But now it appears that Wal-Mart may be scaling back on the partnership due to limited consumer demand, analysts say. That could be good news for prepaid company Green Dot (GDOT), which distributes Wal-Mart's own branded prepaid card.
"While we lack official confirmation, our channel checks indicate that American Express Bluebird reloadable prepaid cards are being removed from the approximately 80 Wal-Mart locations in Western states where the cards were being piloted," write Jefferies analysts Ramsey El-Assal and Jason Kupferberg, in a report published Monday.
"We believe that a termination of the American Express pilot in the context of lackluster Bluebird card sales (implying no further rollout of Bluebird across Wal-Mart's remaining U.S. locations) could remove a significant competitive threat/overhang for Green Dot," it adds.
Spokeswomen for both American Express and Wal-Mart said simply that the cards continue to be tested in "a number of distribution channels." Neither would confirm nor deny the analyst report.
Reuters reported on the Jefferies note on Monday.