Wal-Mart continues to expand financial services

by The City Wire staff ([email protected]) 35 views 

Wal-Mart officials continue to expand their financial services business short of being granted a license to become a bank.

The Bentonville-based retailer announced Tuesday (Aug. 25) it has partnered with Fiserv to allow people to pay bills from more than 2,500 utility, telecom, credit card and other companies.

As it does with most of its services and products, Wal-Mart says the new bill-payment service at its in-store MoneyCenters could save Americans more than $100 million a year in bill-pay fees. Citing statistics from the Aite Group, Wal-Mart notes that 36% of the 53 million U.S. households making less than $45,000 a year pay some of their bills in person. Those in-person “convenience” fees, according to Aite, add up to $292 million a year.

“Customers choose to pay in-person for practical reasons such as getting a printed receipt to confirm payment, paying with cash, holding on to their money longer and paying bills closer to the due date,” Gwenn Bezard, research director at the Aite Group, noted in a statement.

Wal-Mart says its bill-paying fees are about half of the standard third-party fee. According to a Wal-Mart statement, the standard delivery (payment delivered within 3 days) is 88 cents; the next-day service (bill paid within the next available business day) is $1.88; and a same-day service (notification sent to biller within 10 minutes) is $4.50.

Wal-Mart is using the “CheckFreePay” system developed by Brookfield, Wisc.-based Fiserv. Fiserv reports that its system is in place in more than 16,000 retail outlets — supermarkets, drug stores, convenience stores, etc. Fiserv says its system will be used at 3,755 Wal-Mart SuperCenters and Neighborhood Market stores.

is a leader in the walk-in bill payment market, enabling consumers to pay more than 2,500 bills at more than 16,000 retail agent sites nationwide. CheckFreePay agents include supermarkets, drugstores and convenience stores, along with hundreds of independent and chain store retailers.

In July 2005, Wal-Mart filed an application with the Federal Deposit Insurance Corp. to establish an industrial bank charter based in Utah. Wal-Mart officials said they were not interested in establishing a conventional bank, but wanted the license to process about 140 million credit- and debit-cards used by its customers each month. The banking community, including more than 8,000 community banks, opposed the action. The FDIC placed a moratorium on granting industrial bank charters, which effectively quashed Wal-Mart’s application.