The Bank of Wal-Mart?
It could very well happen…sort of…
With tens of millions of low-income customers lacking access to banking services combined with a retailer that wants to keep its customer base and generate as much profit as possible, Wal-Mart is looking into offering banking services to low-income customers:
The retail goliath on Wednesday announced it would offer customers checking accounts with no minimum balance and no fees for overdrafts or bounced checks. Those who get a direct deposit of at least $500 every month — a floor that includes many people receiving government benefits — will have the $8.95 monthly fee waived.
Since the company won’t have a federal banking charter, it is providing this service via Green Dot Bank, which is offering this service exclusively at Wal-Mart locations.
An interesting tidbit:
That Walmart is one of the few options available to poor customers looking for a cheap bank account is troubling, given the retailer’s profit motive, said Wallace Turbeville, a senior fellow at Demos, a progressive think tank. Unlike the Post Office, which some have considered as an option for low-fee checking, there’s no reason for Walmart and its partner bank not to take advantage of customers who have so little bargaining power, he said.
The USPS option is a non-starter. The USPS is bleeding cash, has no capital of its own to get into the banking business and lacks the expertise required to successfully execute a business plan (it’s been out of the business for decades). Also, the USPS is notoriously bureaucratic. The USPS would need a partner willing to provide both its capital and expertise and would also need the same partner to demonstrate extraordinary amounts of patience with the USPS internal decision-making processes.
Not.Gonna.Happen. The Wal-Mart haters can complain all they want. It’s better than payday lending and it’s better than an option that won’t exist, at least not in the near-term.