“Walmart is expanding its money transfer operation to 200 countries, the latest move in the retail giant’s slow but steady push into financial services.
Through the new scheme, people will be able to deliver money from Walmart’s nearly 5,000 US stores to locations abroad within 10 minutes, the company said.
Like its main rival Amazon, Walmart is encroaching on territory historically dominated by big brick-and-mortar lenders. As more consumers increasingly rely on Walmart and Amazon for their daily shopping, tie-ins to their finances are another way to keep customers on the companies’ websites and visiting their stores.
Arkansas-based Walmart first unveiled a money transfer service four years ago, allowing customers to send funds between its stores, and aiming to reach the “underbanked” — about 27 per cent of Americans have limited access to traditional banking, according to the Federal Deposit Insurance Corporation. Walmart claims it has saved customers $700m in fees because it charges cheaper rates.
The retailer has partnered with MoneyGram, one of the big wire transfer groups, to expand globally this month. The service will allow US residents to send money to countries such as Mexico, which received nearly $30bn in remittances last year, according to Mexico’s central bank.
“There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency,” said Kirsty Ward, vice-president of Walmart Services.
Customers will pay $4 to send up to $50, $8 to send up to $1,000, and $16 to send up to $2,500. Money can be delivered to MoneyGram’s agent locations in 200 countries, or an international bank or mobile wallet account.
Walmart’s push into money transfers comes a few months after it announced it was partnering with PayActiv and Even, two financial-technology firms, to offer its 1.4m US employees tools for money management and on-demand access to their earned wages.
The moves suggest the retailer may see itself as a partner of the big financial services companies rather than a direct rival going head to head with basic products such as checking accounts or credit cards. Amazon, too, may be on a similar path: it is discussing a potential partnership to offer its customers bank accounts via JPMorgan Chase, in a deal that could unite the US’s biggest ecommerce platform with the country’s biggest bank.
That marks a contrast to the middle of the past decade, when Walmart tried to go head to head with banks by applying for special charters from the state of Utah. Big banks successfully lobbied against the move, arguing that it was dangerous to mix commerce with banking.
Financial regulators seem supportive of a more collaborative approach. At an industry conference last month, Donna Murphy, deputy comptroller for compliance risk policy at the Office of the Comptroller of the Currency, said she was open to the idea of partnerships between banks and non-banks.
“Three or four years ago, we would have been thought of as . . . like the angry dad on the porch with a shotgun,” she said. “What we’ve been working towards is looking at ourselves more like a marriage counsellor.”
https://www.ft.com/content/9b7309ae-36c3-11e8-8eee-e06bde01c544
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