I didn’t see any eye-catching displays at the Walmart in Latham earlier this week when I dropped in to check on the rollout of Bluebird, the new prepaid-card account just unveiled by the mega-retailer and American Express.
That’s correct: Walmart, synonymous with the masses, and AmEx, synonymous with the wealthy, have teamed up to offer an alternative to traditional debit and checking services that they promise won’t have the kinds of fees — hidden or otherwise — that leave consumers squawking.
Bluebird will offer what are known as general purpose reloadable prepaid cards: They can be used at any retailer that accepts electronic payments and, because they’re reloadable, won’t expire.
No minimum balance will be required on Bluebird accounts and there will be no monthly or annual fees. The cards, branded with the AmEx logo, can be loaded free of charge at Walmart registers; holders who load via direct deposit of paychecks can make free withdrawals at any ATM in the MoneyPass network. There also is a smartphone app for bill-paying, money transfer and check deposits.
In a conference call with reporters last week, Dan Schulman, head of AmEx’s Enterprise Growth Group, said Bluebird was targeted at “a wide swath of Americans who are either unbanked/underbanked or unhappily banked — and that combination is a very large part of the population.” Indeed, 28 percent of all U.S. households — some 68 million Americans — are unbanked/underbanked, according to a September estimate by the Federal Deposit Insurance Corp. The “unbanked” have no checking or savings account; the “underbanked” have accounts, but frequently use so-called alternative financial services, such as check-cashing businesses and pawn shops.
That’s a lot of people needing a way to manage their money. But keep in mind this number too: $201.9 billion.
It represents the amount of money expected to be loaded next year onto prepaid cards, up from $28.6 billion in 2009. The Pew Charitable Trust called the cards “a burgeoning product” in a study released last month that looked at the pros and cons of prepaid cards versus checking accounts, the former largely unregulated and the latter highly regulated.
The numbers speak to the Wal-Mart/AmEx hookup.
Wal-Mart has tried for years to get deeper into financial services — including unsuccessful attempts to secure a bank charter. Instead, it added one-off services at its stores such as check-cashing, bill-paying and money transfers. Now, with Bluebird, Wal-Mart adds more financial street cred through AmEx.
“Customers may actually … think of Wal-Mart first” for both their shopping and financial needs,” Daniel Eckert, vice president for financial services at Wal-Mart, said on the conference call with reporters. “It’s really about providing that convenient, one-stop-shop access.” And AmEx, by partnering with Wal-Mart, gets “to move beyond our traditional consumer set” and reach segments of the population “who might not be … best-served through a charge or a credit product,” said AmEx’s Schulman.
But I’d advise the companies to jazz up their Bluebird rollout, which began this week.
In Latham, a low-key blue-and-green kiosk greets store customers, offering a $5 Bluebird starter kit for immediate use of a temporary card that can be loaded at the register. (Online registration for a permanent card follows at Bluebird.com. Consumers who want to avoid the $5 starter charge can just sign up online.) Eckert said the kiosks would be up for about 60 days before the starter kits take up permanent residence in every other checkout lane at Walmart stores.
I would have hoped for blue-and-green balloons at least.
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily those of the newspaper. Reach her at [email protected]