Why Wal-Mart Will Help Finance Customers

But financial-services experts view this as a positive for the industry that might inadvertently clean up some of its usurious practices. Wal-Mart caters to customers with little or no access to banking services, people who are often described as the "unbanked" or "underbanked." According to ACNielsen, 42% of Wal-Mart shoppers have yearly household incomes of less than $40,000. Many of these consumers pay high fees to subprime and payday lenders for cashing checks and receiving credit. Bank consultant Ely says that those money services and transmitters ought to fear Wal-Mart's expansion. "Wal-Mart will bring increased efficiency and bring down prices," says Ely.

Wal-Mart already has brought on a bonanza of savings for consumers. Wal-Mart says it conducts more than 2 million money-services transactions a week. Last year, customers who used Wal-Mart's services saved an average of $450 a year, or nearly $40 per month, the company said. The opening of additional Wal-Mart MoneyCenters will put more than $320 million back into customers' pockets, according to the retailer. Plus, some consumers are acquiring new financial skills. "As we piloted the card, we were happy to see how quickly our customers began using it to manage their money," says Thompson. "They immediately understood the value and how to take advantage of benefits, such as direct deposit or loading their paychecks in our stores. The acceptance has been exciting to watch because it means we've met a real need for our customers."