Wal-Mart wants to be a credit card company

Posted Jun 6th 2007 8:30AM by Douglas McIntyre
Filed under: General Electric (GE), Wal-Mart (WMT)

According to the Financial Times, Wal-Mart (NYSE: WMT) intends to launch a payment card that would target 80 million US residents. The Wal-Mart MoneyCard would be launched with a unit of GE (NYSE: GE) finance and branded as a Visa.

Wal-Mart will issue the product so that consumers, especially those without high incomes, can use it as a pre-paid credit card which will give the customer the ability to take part of his or her income and transfer it to the card.

Visa estimates that as many as one-third of adults in the US do not have relationships with banks. This includes illegal aliens.

Wal-Mart will collect fees on the cards when they are used for purchases at ATMs and for purchases.

Wal-Mart has been kept out of the banking business by federal regulators. The new card is partially a way around that. It can also be used to cement the retailers relationship with its predominantly low-income customers by offering discounts on certain items for people who use the new card.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Tags: credit cards, CreditCards, ge, general electric, GeneralElectric, low income, LowIncome, Visa, wal-mart, wmt

Print this

Reader Comments (Page 1 of 1)

6-06-2007 @ 8:38AM

Steve said...

That is a brilliant move on Walmart's behalf. If only it was Mastercard. It would be another reason to get on the stock.

http://www.imitrust.com/thepit