At this point, overdraft facilities or a credit line are not available with the account. The companies hope to roll out additional features including check writing facility and more options to deposit money in 2013. Customers can sign up for free at Bluebird.com or get a $5 starter kit at a local Wal-Mart. The accounts are not FDIC-insured but are 100% backed by American Express' Travel Services division, the company said. Neither company would elaborate on how the economics of the product works nor how much money they expect to make from the product. Banks have frequently defended their need to charge fees, arguing that it costs more than $200 a year to maintain an average checking account, which renders accounts with low minimum balances unprofitable. They have also said they are forced to charge customers fees in response to the Durbin Amendment under Dodd-Frank, which caps the amount banks can charge merchants for debit-card transactions. Critics of the rule have said that it benefits big retailing giants like Wal-Mart and has little to do with the crisis. Rochdale Securities analyst Dick Bove says the Durbin Amendment has allowed retailers to enter into banking turf. "The Consumer Finance Protection Bureau (CFPB) was established by the Dodd-Frank Act to monitor all consumer finance activities of banks," Bove wrote in a note Monday. "New products are supposed to be approved by this agency before it is offered to customers. Was this product approved by the CFPB? If not are companies allowed to create whatever consumer financial products and sell them as long as they are not banks? Does this incent the creation of a large shadow consumer finance market?" Bove believes that if up-market customers of banks begin to shift to Bluebird, banks stand to lose. He also expects more retailers will enter the fray increasing competition for banks. Wal-Mart already offers prepaid debit card service along with Green Dot ( GDOT). Shares of Green Dot, which derives more than 60% of its revenue from the offering with Wal-Mart, plunged in Monday morning trading and were last down 18% on the news of Wal-Mart's new partnership with Amex. Daniel Eckert, vice president of financial services for Wal-Mart said during the conference call that the company has no plans to drop its arrangement with Green Dot. -- Written By Shanthi Bharatwaj in New York.