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Just months after it withdrew its application for an industrial bank charter after it became clear the Federal Deposit Insurance Corporation (FDIC) was going to reject it, Wal-Mart has announced that it will open one thousand Wal-Mart Money Centers by the end of next year, facilities that will “assist customers who are outside mainstream banking with convenient, nationwide access to low-cost money services, including check cashing, money orders, bill payment and money transfers.”

At the same time, Wal-Mart will launch its new Wal-Mart MoneyCard, described as “a reloadable prepaid Visa rolling out nationally with GE Money and Green Dot.” According to the company, “the Wal-Mart MoneyCard will be rolled out to approximately 1,300 Wal-Mart stores by the end of June and to another 1,300 stores by the end of July. The card will be available at most Wal-Mart stores by year end.”

Not coincidentally, considering the ill-fated attempt to open an industrial bank, the announcement by Wal-Mart contained a kind of challenge to traditional financial services companies.

According to a statement released by the company, “The rapid expansion of its low-cost money services and in-store locations will help meet the needs of the millions of unbanked and underserved customers who visit Wal-Mart each week for their basic money service needs.”

And Jane Thompson, president of Wal-Mart financial services, said, “Many of our customers are paying too much, traveling too far and not being well served. But they still need to pay their bills, cash their checks and transfer money. We're offering them a safe place and a card to help them manage their money. We've seen firsthand what a difference that can make. It changes lives."

Wal-Mart originally said it wanted to be in the banking business as a way of reducing its own fees on credit and debit card transactions, but traditional financial services institutions opposed the company because they were concerned that Wal-Mart would bring its “always low prices” approach to other banking services.
KC's View:
I have believed all along, and stated in this space, that there was no way that Wal-Mart was just going to accept the FDIC decision and slink away to lick its wounds.

Indeed, the banks may have succeeded in wounding Wal-Mart…but that just made the Bentonville Behemoth mad.

The official statement by Wal-Mart contained the following paragraph:

“Today's announcement comes after months of extensive research pointing to the need for greater access to more affordable money services. Wal-Mart will continue to pilot and test many different products and services in an effort to provide the financial services customers need at various stages of their lives.”

No kidding.