WalMart Extends Hand to Under-Banked Americans

For years, the retailing giant WalMart has been trying to enter the banking and payments space by purchasing a credit card or other limited purpose bank, only to be turned away by state and federal regulators. But that hasn't stopped the Bentonville, AR firm from positioning itself as major provider of financial services to America's under-banked population. Stop by a WalMart Super Center in rural America, and sandwiched between the grocery section and the in-store eye doctor you're apt to find a WalMart MoneyCenter, where customers can cash checks, purchase prepaid Visa debit cards, and now, they can pay bills, too.

WalMart unveiled its new bill-pay service – Walk-in Bill Pay – in August, utilizing CheckFree, a name that has become synonymous will electronic bill pay. Founded in 1982, CheckFree provides back-end support to much of the electronic bill-pay market; it wil be doing the same for WalMart, except in cases of same-day payment, which get processed through MoneyGram international.

Billers participating in the program include utility, telephone, cable, credit card and auto lenders.

“The new service provides convenient, affordable options to the growing number of financially underserved Americans who do not use traditional checking accounts to pay bills in person,” WalMart said in a statement. The company estimates that more than 21 million households pay at least one bill in person at a check-cashing center or other walk-up location every month.

“More and more Americans are looking for ways to save money on financial transactions and enjoy the convenience and confidence of knowing their bills are paid on time,” said Jane Thompson, president Walmart Financial Services, in announcing the new service.

According to the research firm Aite Group, in-person bill-pay is a popular option among under-served families with incomes below $45,000 a year. “Customers choose to pay in-person for practical reasons such as getting a printed receipt to confirm payment, paying with cash, holding on to their money longer and paying bills closer to the due date,” said Gwenn Bezard, research director, Aite Group.

Aite was commissioned by WalMart to study under-banked Americans.

WalMart is confident that its low-price approach to retailing will play well with this group of under-banked consumers. And it cites Aite's research to suggest that consumers using its Walk-In Bill Pay service can save up to 50% on the going market rate among third-party bill payment companies.

Here's the lowdown on pricing: standard delivery of bill payments (delivered within three days) costs just 88-cents; next-day delivery costs $1.88; and same-day MoneyGram payments start at $4.50. Consumers can also purchase secure MoneyGram money orders for a flat fee of 60-cents and mail their bill payments themselves.

“We’re introducing Walk-in Bill Pay nationwide to provide another affordable money service option that will help families manage their monthly budgets so that they can save money and live better in these tough economic times,” said Thompson.

154 million people worldwide received micro-loans in 2007; Just 13,000 of these loans were made to Americans.

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