Wal-Mart to launch payments card-Branded Visa prepaid card aimed at low-income shoppers

Financial Times ^ | 06 June 2007 | Jonathan Birchall

[BGHater]

Wal-Mart plans to launch a payments card aimed at the estimated 80 million U.S. residents who do not have access to a bank account.

Called the Wal-Mart MoneyCard, the prepaid product would be launched with GE Money, the retailer's financial partner, and branded a Visa card, Wal-Mart officials said. An official announcement of the pilot programme could come as soon as this month.

The venture represents a significant expansion of Wal-Mart's financial services offered to mostly low-income customers, which include low-cost check-cashing and money-transfer services.

It also follows the decision this year to abandon a bid to win a state banking licence in the face of a storm of opposition from the banking industry.

Prepaid gift cards are popular in the U.S., generating a market worth $76 billion last year. But Wal-Mart hopes customers will use the cards as quasi-bank accounts to access a range of financial services.

The card would be modeled on the existing Visa Prepaid card, which lets holders have their weekly wages credited to the card, or to top it up at a range of locations, including supermarkets and convenience stores. The card would have a $3,000 limit, with the balance covered by federal deposit insurance through GE Money Bank.

[BGHater]

'Reloadable cards, purchased without paperwork, are also seen as potentially attractive to the estimated 12 million undocumented workers in the U.S.

Visa's Prepaid cards are used by more than 30 states, including California, to pay child and unemployment benefits.'

[July 4th]

Well, Wal-Mart took a ton of crap when they said they wanted to open a bank. This is the next best thing, and it sounds far more innocuous to the average ear.

[Hornet19]

Press 2 for Ingles?

[wanderin]

Wal Mart ping for your morning coffee.

Have a great day!

[PugetSoundSoldier]

This actually could be a good thing to have for traveling overseas. Most places will accept a Visa, but sometimes changing traveler’s checks can be difficult, and in Asia it can be problematic to find an ATM that works.

And since it’s not a debit card AND it’s a Visa, you’ll get the $50 max loss coverage.

And lastly, if your card is lost/stolen or the number copied and used again, it’s not going to wreck a real credit line, since this is prepaid...

[neb52]

Its the smarter path. Why they wanted to be a bank and thus regulated so was crazy. Going the Paypal way is better and is more than likely the future banking model. Wally World should offer the account to be a money market account and offer a 4-5% interest rate. But then they couldn’t insure it. This will also be a wind fall for Walmart. They will rake all the money setting in the accounts and invest it over night making a nice mint.

[neb52]

“And since it’s not a debit card AND it’s a Visa, you’ll get the $50 max loss coverage”

Actually it is a debit card as well. There are 1 million ATMs that this card can be used at.

[Right Wing Assault]

I assume these, like throw-away cell phones, can be purchased without ID. If so, they will help people keep a low profile from law enforcement. A good way to carry a lot of ‘cash’ without having to stop at ATMs and have your location tracked. Great tool for terrorists and other bad guys.