This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

WalMart, AmEx Banking the Poor

NEW YORK ( TheStreet) -- Last month the FDIC made a big deal out of pointing out that 17 million adults are "unbanked," and 51 million are considered "underbanked," meaning they have poor access to checking accounts and credit cards.

Every big problem like this has hidden within it a big opportunity, as American Express (AXP - Get Report) and Walmart (WMT - Get Report) seem bound to prove.

Without banks, consumers rely on check cashing services and pawn shops that take a huge bite out of every dollar going through them. Companies like Fast Cash Financial Services (FCFS - Get Report) on the transaction side and EZ Pawn (EZPN) on the credit side do big business, as I noted at Seeking Alpha recently, because they have offices where these people live. The margins are enormous.

Past efforts to reach these consumers through technology, prepaid debit cards offered by companies like Green Dot (GDOT - Get Report) and Netspend (NTSP), have failed, even with celebrity endorsers like Russell Simmons and Magic Johnson, because it's tough to get poor people to trust plastic and celebrities aren't brands. Plus, folks want a physical location, not a virtual one.

After trialing this business earlier in the year and seeming to back off due to poor results, as American Banker reported at the time , WalMart and American Express have now decided to go all-in with a prepaid debit card dubbed Bluebird, Yahoo News reports.

Bluebird offers the unbanked and underbanked enormous value. These are Walmart shoppers. They can now get money turned into AmEx card value at any Walmart cashier, rather than having to join a single line at the front of the store. This makes a difference. Walmart cashiers don't have glass windows in front of them. Walmarts are clean. Try being a mom living on $30,000 a year -- things like this make a difference.

A modest paycheck, deposited directly through Bluebird, will now create free access to 22,000 ATMs in Amex's ExpressCash network. I just checked near my own Atlanta address, and found 15 ExpressCash locations within 1.2 miles of my house. Apparently those no-name "ATM machines" at all the local convenience stores are actually AmEx machines -- who knew? Next year the plan is to roll out paper checks -- nothing gives my neighbors more pleasure than writing checks that won't bounce.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AXP $65.43 -0.62%
FCFS $45.73 -6.10%
GDOT $22.23 0.23%
WMT $66.87 -2.96%
AAPL $93.74 -1.15%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs