NEW YORK (TheStreet) - Walmart (WMT - Get Report) is adding to the list of financial services that it provides for its under-banked and unbanked consumers, by launching a low-cost money wire transfer service. Walmart says it will allow consumers to transfer money for up to 50% less than other wire transfers.
Known as Walmart-2-Walmart Money Transfer Service, the world's largest retailer partnered with Ria Money Transfer, a subsidiary of Euronet Worldwide (EEFT - Get Report), and a leading global provider of money transfer services.
The service, which is available starting April 24, allows consumers in the U.S. to transfer money up to $900 to any one of the 4,000 domestic Walmart stores - including its supercenters, Walmart Neighborhood and Walmart Express locations. Walmart is touting that the service has only one fee, under a two-tiered pricing system.
Wire transfers up to $50 will cost the sender $4.50. Wire transfers up to $900 will cost just $9.50, the company says. Additionally, recipients need only to have the correct passcode or answer security questions in order to receive the transfer - a driver's license is not required.
After listening to customers complain about the high cost of wiring in the U.S. the company saw an opportunity. "The new service will put money back in the pockets of millions of Americans," Daniel Eckert, senior vice president of services for Walmart U.S., said on a conference call with reporters. Ecker said Walmart has "removed the complex and often costly fees that come with each transaction" to offer a "clear and straightforward fee structure."
Nearly 28% of Americans are classified as either "underbanked" or "unbanked," with millions using money transfers as a critical part of maintaining household budgets or helping friends and family in times of crisis. Communities that rely on money transfers the most include members of the military or oil field workers who send part of their paycheck back to their families each week, Walmart said in a release.
The new transfer service does have limitations in that customers cannot send more than $900 a day through the service. Nor can they transfer money to stores outside the U.S. Walmart also offers flat-fee check cashing and bill pay, money orders, tax preparation services, as well as pre-paid cards as an alternative to checking and debit accounts. It also offers online wire transfers as well as those outside the U.S. and for larger amounts with partners MoneyGram and Xoom. Walmart says the new service will only be available in stores.
Eckert wouldn't comment on how much volume Walmart expects to be doing in wire transfers through the new service. "Our role is to provide choice for our customers," he said. Walmart-2-Walmart is "an extension of our broad assortment of ... financial services."
According to Reuters, roughly 1% of Wal-Mart U.S. sales last year got came from financial services such as money orders, prepaid cards, wire transfers, check cashing and bill payments, citing its latest annual report.
--Written by Laurie Kulikowski in New York.