Posted on 10/18/2012 3:03:29 AM PDT by RKBA Democrat
WalMart has teamed up with a very unlikely partner to reinvent banking for the masses.
The nation's largest retailer is now in a new alliance with American Express for a partnership called Bluebird.
With Bluebird, you get an essentially fee-free alternative to debit and checking accounts that all starts with a stored value card that's branded with the AMEX logo.
It's easy to use. You simply deposit money online, via a smart phone app, or at any Wal-Mart cash register in the United States. Check writing capabilities will be introduced later in 2013.
Another nice benefit of the Bluebird card is that it comes with no foreign currency transaction fee, so that makes it an ideal card for travelers to use overseas.
But mark this well, your Bluebird account is not FDIC insured.
Your money instead is the under protection of American Express. AMEX would essentially have to go bust for you to lose your money, a very unlikely scenario, but one I do need to point it out as a possibility.
We're in an era where giant monster mega-banks are trying to fee customers to death. A recent report from BankRate.com found that the minimum balance required to avoid fees on a checking account is up 365% in five years!
You won't encounter that with Bluebird.
Meanwhile, what Wal-Mart and American Express are doing is similar to what PayPal is doing with Discover -- all of them non-bank entities looking to reinvent banking.
But the whole idea of really clean-sheeting banking goes back to ING Direct, with their emphasis on no fees, no gotchas, and no minimums.
As to how it will work with Bluebird, what issues will come up, we have no idea yet. I know if AMEX makes this a customer no-service experience, that will boomerang back to me and I'll get the complaints.
Still, I love the idea of a whole new approach. You'll be able to walk up to a cashier and make a fee-free deposit to your account. Wal-Mart retail locations will becomes bank 24/7 almost all over the country. That's a great alternative to very limited traditional banker's hours.
Think of this as equivalent to the convenience of giant monster mega-banks but without all the fees.
While I still think that a good credit union is a better choice for most folks, this looks to be a great alternative for banking services for those who can't get or afford a bank account. The Clark Howard article touches on some of the things that this new service does, but doesn't get into some of the details. This is essentially a pre-paid credit card account but on steroids. It will allow you to:
-cash checks via your smartphone (bye-bye check cashing services)
-transfer funds for free to other card holders. As setting up an account is free, this will take a real bite out of western union.
-Free web bill pay. Can't see the details as I don't have an account, but looks to be a de facto online checking account.
-Allowance for subaccounts....you can give to other family members and control their use.
-Allows you to deposit cash to your card/account at any wal-mart.
-ATM access. Free if you direct deposit to the account, small fee if you don't.
This is not an endorsement as I don't use this yet, but looks to be a very cool idea and a game changer for retail banking.
FDIC is a disgusting scam. It forces small banks to cut rates from 1/2 percent to 1/4 or zero while larger banks make their profits on absurdly low Fed rates. The FDIC is backed up by the full failure and bankruptcy of the Federal government. Kudos to Walmart to thumb their nose at the FDIC, but mark my words, the PTB are not going to be happy and will try to penalize them.
The main problem I see is that, unlike a credit card, if somebody makes unauthorized charges against your account, you have no recourse.
Not that I don't think it's a great idea, you just have to be aware of the differences.
Yeah; that would be a problem.
It think it would be useful as a fall-back resourse in addition to regular banking. Just keep a small amount in it for emergencies.
Also, I could see the possibility of having a card for my mom in NY, with “us kids” adding money to it long-distance as needed. (Not sure if that will be a feature, but it would be a good one.)
Wrong. They offer $0 fraud protection just like a regular american express.
I picked up a card for myself and my wife today. I am replacing an old walmart green dot card and she is dumping US Bank after they reversed a posted deposit and made the account negative then hit her with 15 35 dollar over draft fees.
The check was good and “we’re so sorry. we don’t understand what went wrong. It was not the check, or the account the check was drawn on. (check writer and casher both bank at US bank) bring the check in once you get it back in the mail and we’ll post it right away. What? OD fees? We’re sorry, we can’t do anything about that. would you like to sign up for ready reserve to prevent that in the future?”
The check was posted to the account. I am not done with them and the 525 dollars they think we owe them. It would be one thing if the check was bad, but it was not. It was verified by the ATM when deposited. Even the branch manager said “it should have cleared. We don’t know what happened”
Long story short. eff the banks.
I paid 12 dollars total this year in “bank” fees with the walmart card. Those 12 bucks where ATM fees I could have avoided if I went to a walmart (didn’t care. just give me some money) Wife was paying 8 bucks a month just to have an account at US bank because we are currently unwilling to let 2000 bucks sit in an account to keep them happy and wave the fee. In other investments 2000 bucks returns far more than 8 bucks a month.
An great way to move cash into and out of the country.
What could go wrong here ?
“Also, I could see the possibility of having a card for my mom in NY, with “us kids” adding money to it long-distance as needed. (Not sure if that will be a feature, but it would be a good one.)”
It’s already a feature. You can transfer money to other cardholders for free. That’s why western union is not gonna be happy.
“Kudos to Walmart to thumb their nose at the FDIC, but mark my words, the PTB are not going to be happy and will try to penalize them.”
Walmart applied to open a bank years ago, but the banksters got together and prevented it. So, WalMart has just done an end run with the help of Amex. FDIC insurance is not a requirement and this isn’t a bank per se. But it operates like one. Checking is coming from what I hear. Probably something like a conveneience check with a minimal (or no) fee.
Just wait till when “Wal-Mart Mortgage” opens up shop.
“An great way to move cash into and out of the country. What could go wrong here?”
It’s not a bug, it’s a feature.
$525 bucks in OD fees?
Stories like that will see this take off. The lack of FDIC insurance is an issue but then again, which do you trust more: the full faith and credit of WalMart plus Amex or the full faith and credit of the FDIC plus hussein?
I own Walmart stock. I hold not government bonds. ;)
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