Wal-Mart (WMT) announced Thursday plans to start a new domestic service that will let customers transfer money to and from more than 4,000 stores in the U.S.
Beginning April 24, the new Walmart-2-Walmart service will offer a clear fee structure with just two pricing tiers: $4.50 for transfers up to $50 and $9.50 for up to $900. That’s substantially cheaper than most competitor prices. For example, transferring up to $500 will cost $9.50 at Wal-Mart compared with $34.50 to $40 at a competitor, according to a company statement.
“After listening to our customers complain about the high fees and confusion associated with transferring money, we knew there had to be a solution,” said Daniel Eckert, senior VP of services for Walmart.
The news rippled across the money transfer industry, prompting shares of MoneyGram (MGI), which provides money-transfer services in Wal-Mart stores, to nosedive by more than 21 percent. Western Union (WU) also took a hit, losing nearly 9 percent of its value.
Officials at the mega-retailer say the new service, which brings Wal-Mart even deeper into the business of providing banking services, will have broad appeal among the ‘unbanked’ and ‘underbanked,’ the 28% of Americans with limited or no access to the traditional banking system.
Walmart-2-Walmart will be available starting next Thursday. The company will limit the service only to payments that are sent and received in the U.S.
WMT rose 44 cents, or 0.57%, to $77.66 in early trading Friday.