Walmart Takes on Banks

Wal-Mart today announced a partnership with American Express on a new product that is designed to be an alternative to debit and checking accounts.

Dubbed Bluebird, the product is an Amex-powered card that is available online and at more than 4,000 Wal-Mart stores starting next week. Bluebird can be used at locations that accept American Express and approximately 22,000 MoneyPass ATMs around the country.

According to Wal-Mart, Bluebird was developed from a pilot program launched in late 2011, and shaped by feedback from consumers who said they were not getting the value they expect from traditional checking account and debit services because of increasingly higher fees. The retailing giant cited a recent Bretton Woods study indicating that the average American pays $259 per year for a basic checking account, and said the purpose of the Bluebird card is to offer a low-cost alternative to traditional checking accounts.

According to the company, Bluebird will feature no monthly or annual fees, nor any fees for adding money to the account. Withdrawing cash through the MoneyPass network is fee free and surcharge free for Bluebird customers enrolled in direct deposit. For customers not enrolled in direct deposit, each MoneyPass ATM withdrawal is $2. For out-of-network ATMs, each withdrawal is also $2, though additional ATM operator fees apply.

Members can deposit money in various ways, including payroll direct deposit, remote check capture via the Bluebird mobile app, using cash at any Walmart register, or by linking a checking, savings, or debit card to the account.

Bluebird also has several mobile features, including person to person (P2P) payments, mobile app functionality, and the ability to control subaccounts for friends and family from a smartphone. Bluebird is built upon the digital payment capabilities of American Express' Serve platform.

Madeline Aufseeser, a senior analyst with Aite Group, said the Bluebird announcement is the latest in the "red hot" prepaid market, and that consumers will ultimately benefit from more product choices.

"Consumers will benefit greatly as product pricing comes down and there are more product choices on the market," she said. "Prepaid providers will have to become more efficient and nimble in order to protect margins on the business at the risk of getting squeezed out. Large companies that are vertically integrated such as American Express, NetSpend, and JPM Chase are in the best position to capture market share and expand reach."

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Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio