Last Updated Aug 26, 2010 2:33 PM EDT
Walmart has been adding financial services designed to cinch its relationship with the "unbanked" -- folks who generally lack access to checking accounts, credit cards and other common tools of personal finance. Its approach has been incremental; the company started out with services such as low-cost wire transfers and has built from there.
The retail giant's prepaid debit card may not be the greatest deal for everyone, but for credit-challenged Walmart shoppers whose tight budgets include big fuel bills, the savings could prove attractive. That's a potentially big deal, given that its many stores in rural and exurban communities draw large numbers of gas-guzzling shoppers. The move also puts Walmart ahead of its major rivals, none of whom provide similar prepaid cards right now.
Take, for instance, Kroger (KR), which provides a variety of rewards for customers holding one of its 1-2-3 MasterCards. Taken together, those probably provide better savings than Walmart's program. To get them, though, consumers would first have to qualify for the card, which isn't prepaid -- and that can be a dicey proposition for many of the customers Walmart is trying to reach. Plus, shopping at Kroger tends to be a bit more expensive than at Walmart.
Walmart, by contrast, makes things simple. Some criticized the retailer for the fees associated with its prepaid card, which include a $3 -- not $6 as the card agreement may make it appear -- for registration and a monthly $3 charge. That said, if shoppers use the card often enough, they could cover some or all of the monthly charge. Buying $300 a month in gas, for instance, would cover the full cost of the card.