Posted on 03/03/2005 1:24:02 PM PST by Ace of Spades
Wal-Mart already offers money-transfer and check-cashing services. The next step is full-on banking. The financial services industry is terrified, but consumers might benefit.
(Excerpt) Read more at moneycentral.msn.com ...
Could be big!
Where does a 800 lb gorilla bank? Anywhere he wants to......
bump
They also do check printing for substantially less than other places. You have to do it online, though.
I dont see how adding this type of service diversification to their portfolio would constitute a monoply
I've been predicting Wal-Bank for a long time. It will be the only place you have to go to do any business transaction on earth (or maybe in the solar system).
For banking purposes the Walmart customer is the kind of small account customer that banks hate dealing with. It'll be hard to make money off of them. And that "Credit card companies that use every excuse to jack up rates" comment is interesting in light of the prime plus 14% rates that Walmart has on their card, with adjustable late fee and the rest.
Walmart, a monopoly? Where's the barrier to entry for other companies? How are the monopolizing the market? What anti-competitive practices are they doing that harm consumers?
I'd rather some other company drive down banking coasts than Walmart and possibly partner with Walmart to reach their customers with in store banks.
However, many of Walmart's competitors are already in the banking business, so it's hard to say Walmart is trying to get an unfair advantage.
Not too worried. Walmart can't do banking the way they do retail. And (from personal experience) it's close to impossible to make those branches IN WalMarts successful.
Remember all those "Internet only banks" that were going to put us all out of business? Where are they now? It's close to impossible to get your "supply chain" much cheaper than a bank can do... and you aren't going to get there on lower prices + higher volume... the margins just aren't that high as it is.
The other thing they are missing (and I mean no offense, because I shop there too), but their client base isn't exactly the same as a bank's favorite market segments. I opened a couple branches in those stores... but didn't approve a lot of credit.
If they're doing it because they have a lot of capital (like a FoMoCo)... more power to them. But I don't think banks have anything to worry about the way grocery stores do.
"For banking purposes the Walmart customer is the kind of small account customer that banks hate dealing with. It'll be hard to make money off of them. And that "Credit card companies that use every excuse to jack up rates" comment is interesting in light of the prime plus 14% rates that Walmart has on their card, with adjustable late fee and the rest."
What Walmart has done extremely well is to go into businesses with low profit margins and make money by keeping overhead low and efficiency high.
Banks are making very high profit margins. In a competitive market you can only make really high profit margins if you provide something others don't offer, or there's collusion going on between companies to keep profits high for everyone.
Walmart could undercut banks by simply offering the services most people want and need.
Banks would be able to continue to be viable by offereing services that it isn't cost effective for Walmart to provide.
The banks would likely get to keep their favorite types of customers, but their market would shrink considerably.
That's a good cause for fear among banks.
Walmart went into the banking business, because of the high fees charge by credit and debit cards
If so then all I can say is .......... GO WAL-MART, GO for it!!!!!
Wow! They already own half of the groceries store with gas station facilities here in my back of the woods. Wal-mart has around 5 HUGE super stores and neighborhood stores popping all over my city, plus a couple of SAMS...I KID YOU NOT! Truth be told, I don't like them having a SUPER monopoly over all the important essentials. They are driving out small businesses in my area. It's scary to think someday they'll control where we buy our food, gas up,and do our banking and in the near future our utilities! Does 666 ring a bell? OOOOOOOOO...scary!
I hate Wal-Mart.
It is already happenening. And it is called Arvest.
[They have several banks throughout the South already.]
Hey! If KODAK can do it, why not WALMART?
You cannot stop the Wal-Mart.
only hope to contain 'em...
My neighbor is a bank vice president and a staunch lover of pro free trade (he's a free traitor). He does not give rats a** if people lose their job because it's done cheaper in china /india than over here.
Wait till I show him this article. I'm going to laugh while I give it to him.
They make one huge wireless networking internet service provider as well.
Stick up long range telecom towers and they could crash into the cell phone market as well.
The brick and mortar is already paid for. They can also lay in a nice loss leading checking account and then get into the money markets and credit from there.
Wal Bank is going to scare Wall Street to death.
Anything that puts fear into the big monopoly banking industry is fine by me.
I'm no expert in this area, but wouldn't it be worth it to Wal Mart just for the savings on Credit Card transactions and check deposits alone? The savings on their own banking alone plus basic banking simply getting more people in the store with their paychecks etc....seems like a no brainer..not necessarily putting people out of business.
"Monopoly"??? Have you ever heard of Target, BJ's Wholesale, Meijer's, -- and that's just the general big box stores, not counting the Best Buys and Ikeas of the world.
If you want to stop the most pro-consumer, successfull American business of the past half-century, I suggest you go back to North Korea, where starvation communism is still practiced.
Bank Walmart offers lower rates, but you have to keep your money in Yuan.
This is a complete myth. Walmart's target competitor is not the local Mom and Pop store. Before Walmart came to my town about 10 years ago, the local downtown was nearly a ghost town. All the local merchants complained that Walmart would be the complete death of downtown. Now, 10 years later, those same merchants are still in business and downtown has grown and is thriving. We have several new cafes and restaurants, boutiques, and other types of businesses. The town had been trying to get another supermarket to locate here (we currently have 2 within 1 mile of each other). All supermarket chains said that our local economy would not support it. Now, Walmart is expanding into a "Supercenter" and guess what--2 other supermarket chains are building stores in my town now too. Imagine that.
Gosh darn, yours is the only little town in the late sixties that saw a decline, and is therefore the end-all example of the wickedness of WallyWorld. Let me guess: It was a small farming, ranching, manufacturing or mill type community without a diversified economy. Nope have not heard of that before. Nosiree! Call John Kenneth Galbraith and Hobbes and tell them that they were right. Lets destroy choice, crush the machines and live like noble savages. Luddites unite!!!!! Agrarian Forever!!!!!!!!
I'll stop now, here's your sign.
I did a second mortgage with a big bank. They paid off two of my credit card balances - twice. They apologized and told me I had to get the money back myself. I asked for the balance of the amount in my checking account - twice. They laughed.
And already being leased to another business being put to other use (the bank pretty much has to be at the front of the store).
They can also lay in a nice loss leading checking account and then get into the money markets and credit from there.
Been there... done that. There is no "there" there. You just get a lot of "loss leader".
Here's the secret... banks don't make profits on deposit accounts (though rising fee income certainly helps), they have to loan the money out...
and people don't go to big bloc retailers to borrow money. We simply couldn't make loans there. Believe me we tried - hired the best people, gave them special training, gave it some time. It just doesn't work. Oh.. customer's LOVE it.. as a convenience branch. But they don't do the kinds of business a bank thrives on in-store.
As for Wall Street? We didn't try that product line in-store, but I seriously doubt anyone is going to do their financial planning at a WalMart.
And again... it's just a different demographic. I remember helping out with the grand opening of a couple of these branches. At my first one we had one of those giveaways for credit card application. I brought in a RECORD number of aps for any branch I had worked at. More in one day than on any given month at my "home" branch.
I could only approve ONE of them. ONE!
And that one was a big stretch. I did it because he had NO credit (instead of BAD credit) and was an employee of the WalMart. I wanted good relations with the people who would be sharing a workplace with my people.
I don't want to even get into a discussion of mortgages and big banks..............
I can feel your pain. We just refinanced and the bank told us a couple things had to be fixed and they were holding money in escrow...at first they said the kitchen floor and the ceilings in the living room and bedroom........OK, no big deal these were things we were going to do anyway. when the papers were being signed we were told it was the kitchen floor and the front bedroom ceiling. Great. We called last week to get their person back in here and they informed us that we were supposed to do the kitchen floor and the ceiling in basement front bedroom.........we don't have a basement. Let alone a front bedroom in it.
If Wal-Mart were to offer banking services, I would be first in line. They couldn't possibly be any worse than anything else out there.
Can you say Discover Card???????? That was Sears start in financial services.......they don't seem to be going anywhere.
You're right.
I have yet to see a community hurt by the arrival of Wal-Mart. while there may be some, I agree with you, it is mostly myth grown out of proportion by the Wal-Mart haters of the world (and FR)
Makes you wonder what they will do when all of the competition is gone.
If Wal-Mart goes ahead with this - and I hope they do - they will probably fumble around for a time finding out how the banking business really works. Remember when everyone laughed at them about groceries? I did. Now it is my favorite place for groceries. The established grocery stores are crying and hoping they could be WM.
Someone told me he once used a payday loan service. I pointed out the banks run one without asking. They refuse to show money deposited until later, declare the account is short, then charge fees that equal payday loan rackets.
Will the ATM's only dispense Chinese yuan?
Those payday loan places are saints compared to what some banks do nowadays.
There is NO reason an autodeposit paycheck should be held for 3 business days....and the b*tch of it is that many employers, particularly governments, require automatic deposit of paychecks.
I was never a big fan of Wal-Mart, but only because I didn't shop there often because it was a hassle to get there for me. Now it is rather easy, and the local Wal-Mart is a big, bright, clean store with pleasant and knowlegeable staff, so I don't mind going.
The constant Wal-Mart bashing I find here on FR has made me pay much attention to products, attitudes, etc about the chain. I find much of the bashing of WM to be totally unfounded.
As long as there is Target, Kohl's, Nordstrom, Macy's/Federated, Bed Bath & Beyond, etc. HOW CAN ANY FOOL ARGUE THAT WAL MARTS IS A MONOPOLY?
I refer to them as SOCIAL(ist) Conservatives.
LOL!!!!!!
Another phrase used often by some FReepers is CONVENIENT conservatives.........IOW when conservatism is to their liking.
I would think they'd do walmart credit union...and skirt all the fees banks pay (and pass on to customers...with a big markup)
I guess any fool can or can not depending on their ability to make a civil conversation.
How do you expect to change anyone's opinion by screaming.
Wal Mart, btw, accounts for slightly under 8% of total U.S. retail sales. If that's a monopoly, lets just go ahead and give everybody his own little business until Wal Mart has 0.0000000000000000000000000000000000008% of the total retail market.
If Wal Mart attempts to go no fee, or offers same day fund availability, Citi and B of A would simply do the same. It could only be for the good.
Now that that you have left that little dropping, would you mind sharing why you feel this way? I mean do you have a stateable reason, or do you just f-e-e-l? I mean just leaving a pile on the carpet is fairly puerile, no?
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