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Wal-Mart Really Wants To Be Your Bank, Retailer Launches Mobile Checking Account

This article is more than 9 years old.

Wednesday Wal-Mart and prepaid card provider Green Dot launched GoBank, a mobile-first checking account that aims to serve the nation's under-banked.

"GoBank is breaking down the barriers to traditional banking and brings the benefits of a FDIC-insured checking account that’s loaded with features to a large segment of Americans,” said Green Dot CEO Steve Streit in a statement. The accounts will have no minimum balance, no overdraft fees will be charged and account holders will gain access to 42,000 free ATMs.

At $8.95 a month (plus $2.95 for a "starter kit" purchased at a Walmart store) GoBank is not the cheapest checking account around, but the monthly fee will be waived for customers who set up a direct deposit of $500 or more. According to Streit an independent Bretton Woods study found that customers pay approximately $218 to $314 annually for a basic checking account. That means even folks paying GoBank's monthly fee ($107.40 annually) should come out ahead.

Echoing a sentiment shared when the retailer launched its Bluebird prepaid card with American Express in 2012, Daniel Eckert, senior vice president of services for Walmart U.S. added, “Walmart customers want easier ways to manage their everyday finances and increasingly feel they just aren't getting value from traditional banking because of high fees."

Back in 2012 Halah Touyalai wrote a piece titled, "Walmart Targets Unhappy Bank Customers With New Prepaid Card--Should Big Banks Be Nervous?" In it she points out,

The rise in the cost of traditional banking is one reason some consumers ended their relationship with banks. The FDIC says one in four (28.3%) of all U.S. households conduct some or all of their financial transactions outside of the mainstream banking system. They’re called the 'underbanked' or 'unbanked'. Their main reason for skipping traditional bank accounts: They believe they do not have enough money to open one or that they do not need or want an account.

Walmart thinks it can help those consumers with its growing financial center offering everything from check cashing, money transfers, bill payments and pre-paid debit cards."

Wal-Mart and Green Dot also seem to be taking a cue from (or perhaps aim at) a number of money management startups. GoBank offers early access to your paycheck if your employer notifies GoBank of a direct deposit in advance of your normal payday. This is similar to a service offered by startup Activehours, which my colleague Lauren Gensler profiles here. Like Paypal's Venmo service GoBank allows customers to send money to friends via email or text message. This is a service online bank Simple has also integrated into its platform and similarities to the BBVA owned bank don't stop there.

Simple has tried to differentiate itself by integrating personal financial management tools alongside customer funds. While it is not yet clear how robust GoBank's options will be, it will offer a budgeting tool and a "Fortune Teller" function that advises customers on purchases based on planned income and expenses. If someone is trying to buy an item beyond their means the feature might respond, “Remember that time you won the lottery? I don’t either.” This snarky tone, so distinct from the formality customers generally expect from financial institutions, may be derived in part from the approachable voice start-ups like LearnVest have brought to financial advice.

Green Dot shares were up about 14% to $21.50 in morning trading. Wal-Mart Stores shares were up about 1% to $76.38. GoBank will be available across the United States by the end of October.

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