Wal-Mart jumps into money transfer

  • Associated Press
  • Thursday, April 17, 2014 3:30pm
  • Business

NEW YORK — Wal-Mart is delving deeper into financial services at its stores and shaking up the money transfer business.

The world’s largest retailer introduced a new money transfer service Thursday that it says will cut fees for its low-income customers by up to 50 percent compared with similar services elsewhere. The Walmart-2-Walmart service is being rolled out in partnership with Ria Money Transfer, a subsidiary of Euronet Worldwide Inc.

Shares of MoneyGram and Western Union plunged almost immediately Thursday after the announcement.

The service, which will be available starting April 24, allows its customers to transfer up to $900 to and from more than 4,000 Wal-Mart stores in the U.S.

It’s a huge footprint that could reshape that industry and is likely to set off a pricing battle.

Customers can transfer up to $50 for a $4.50 service fee and up to $900 for $9.50.

Comparable services elsewhere cost up to $70 when transferring less than $1,000, according to Wal-Mart.

Western Union on its website puts the price of transferring $900 in New York between $20, if using a bank account, to $85 if using a credit or debit card.

Wal-Mart’s announcement is the latest way it’s acting more like a bank. About a decade ago, Wal-Mart applied unsuccessfully for an industrial bank charter. Those efforts were blocked even though the retailer vowed it would not open retail branches but wanted to use its bank to process card transactions. In 2007, it abandoned those plans, but it has been creating an expanding menu of financial offerings for customers, aimed particularly at those with limited access to banks. Wal-Mart already offers prepaid cards, check cashing services and tax preparation services.

Shares of MoneyGram International Inc., which could get hit the hardest, fell more than 15 percent to $15.25 in midday trading. MoneyGram is the company that currently provides money transfers to Wal-Mart. The stock of Western Union Co., its rival, fell nearly 6 percent to $15.19.

MoneyGram could not be reached immediately for comment. But in a statement emailed to The Associated Press, Western Union said, “Our retail product and service offerings today are already quite diverse. “

Western Union noted that people have the flexibility to send money in minutes or next day from a retail agent location or online and they can also send money directly into a bank account.

“The company is well positioned in the U.S. domestic money transfer space, having offered a fee of $5 for $50 since 2009,” Western Union added.

Wal-Mart is aggressively trying to increase foot traffic in its stores after seeing comparable-store sales decline for four consecutive quarters.

The Walmart-2-Walmart service may help stem that trend, giving customers just one more reason to spend more time inside Wal-Mart.

Daniel Eckert, Wal-Mart’s senior vice president of services, said that the move into the money transfer business gained momentum after company officials heard complaints from customers about high fees elsewhere. He acknowledged in a conference call Thursday that the program could bring more customers into stores, but he insisted that the goal is to offer shoppers more financial choices.

Eckert told reporters that it didn’t alert MoneyGram that it was teaming up with Ria, but said that for more than a decade Wal-Mart has had a strong partnership with MoneyGram and that it renewed its contract in 2012. He pointed out that MoneyGram has no money transfer limits and customers can transfer funds outside the U.S. using its services.

“Walmart-2-Walmart brings new competition and transparent, everyday low prices to a market that has become complicated and costly for our customers,” Eckert said.

According to a 2011 study conducted by the Federal Deposit Insurance Corp., 29 percent of American households do not have a savings account, while about 10 percent do not have a checking account.

Shares of Wal-Mart Stores Inc., based in Bentonville, Ark., rose 32 cents to $77.54 in trading Thursday.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.