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Walmart Makes a Play for the "Unbanked" Consumer With a New Prepaid Debit Card

Walmart (WMT) is providing a one percent cashback bonus for consumers who use its prepaid Visa to buy gasoline, another step in its long, concerted effort to build loyalty among lower income consumers.

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.

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