Credit Cards

Walmart & AmEx Team Up for Low-Cost Prepaid Card

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A lot of attention has been paid to the cost of prepaid and traditional debit cards in recent years, and now the nation’s largest retail chain is partnering with a major financial institution to create a competitive entry into that market.

Walmart and American Express recently announced that they were going to release a new prepaid card option specifically targeted to the store’s lower-income shoppers, according to a report from Reuters. The card, known as Bluebird, will be available in all of Walmart’s 4,000 stores nationwide and the company hopes it catches the attention of its millions of customers who many financial experts would consider to be “underbanked.”

The move is something Walmart has been eyeing for a while, given its size and clout with the average American shopper, the report said. Now, it is that much closer to entering the banking market. Further, the company has also begun offering life insurance through Metlife in certain stores in both South Carolina and Georgia as a means of pilot testing a program that, if successful, could be rolled out nationwide.

“Walmart is doing everything it can to be a financial services provider to the largest number of Americans possible,” David Robertson, publisher of the payment industry publication The Nilson Report, told the newspaper.

Bluebird will be available in stores next week and will feature many things that consumers who don’t have access to traditional banking accounts may value, the report said. This includes no balance requirements and no monthly or annual fees. Further, unlike most other prepaid cards, customers will pay nothing to add money to their Bluebird accounts. The card will also be accepted wherever AmEx is, rather than just at Walmart.

The plan will also allow Walmart customers to use their cashiers as bank tellers, the report said. Further, cardholders will be able to enroll in direct deposit, and even take pictures of checks with their smartphones and deposit them remotely.

Gerri Detweiler, Director of Consumer Education for Credit.com, says there are a few things consumers should consider before signing onto a prepaid product like Bluebird.

“Understand that with a prepaid card you don’t have the same consumer protections you have when you use a credit card to make a purchase,” she says. “You can’t dispute a charge if there is a problem with something you buy on a prepaid card. Instead it’s more like paying cash for the item.”

Many companies have been working on ways to make it easier for underbanked consumers to have access to low-cost prepaid accounts, but many offerings have also been criticized for being too costly or ineffective in allowing low-income consumers to manage their finances in the way that those with traditional accounts might.

Image: matteson.norman, via Flickr

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