Walmart (WMT) may not be synonymous with financial services, but the retail giant is increasingly elbowing its way into the money business.
Three years ago, it started offering money transfers, long the domain of MoneyGram and Western Union. These services are often popular with consumers who aren’t customers of traditional financial companies, like the 9 million American households that are unbanked or lack either a checking or savings account.
Walmart on Wednesday said it’s lowering its fees on wire transfers, adding that its prices are 20 percent to 90 percent lower than competing services. It’s also including a money transfer capability in its Bluebird app, which is offered through American Express (AXP). Walmart bills the service as providing the “benefits of banking without all the fees.”
“It’s an area where we’ve continue to see some great results over the past few years and have seen great demand,” said Kirsty Ward, vice president of Walmart Services.
Walmart said it now charges $4 for transfers of up to $50 instead of $4.50. Transfers from $50 to $1,000 now cost $8 instead of $9.50, and transfers above that cost $16 instead of $18.
The company figures it’s saving $500 million for customers who otherwise would pay up to $160 for wire transfers. Ward said expanding its services helps makes a trip to Walmart stores more efficient for customers.
“We feel the value of saving time is almost becoming as important as saving money,” she said. “We never have enough time to make sure time spent shopping in stores is time well spent. If we can make it faster and simpler for the user, that’s a win for us, because we can start to lower our operating costs and for the customer.”
The types of Walmart customers who rely on money transfers include temporarily displaced families, such as people who have recently moved for a job, as well as members of the military, who frequently send money home. Other customers use the service to wire money to family members or friends who are in need of cash.
“I can say we serve millions and millions, and we’ve seen the business grow. That’s why we’re continuing to invest in it,” she said. “It’s not just pricing, but the convenience perspective.”