Federal regulators and the U.S. banking industry have blocked several attempts by Walmart to offer banking services at its 8,500 retail stores nationwide. But Walmart (WMT) hasn’t given up yet:
“Wal-Mart hopes to ultimately create a branded bank, much to the vehement opposition of the U.S. banking industry. The company has been twice denied takeovers of banks, but it has expanded its financial services drastically and silently through partnerships with Discover, GE Consumer Finance, MoneyGram International and SunTrust Banks, which entitles its customers to discounted money transfers and check cashing services. If the company ever becomes a bank, its footprint would be massive, with an instant 8,500 stores becoming bank branches worldwide. The prospect of Wal-Mart becoming a bank that utilizes the same low margin but high volume approach to financial services horrifies many national banks, which would suffer the same fate as the small general stores Wal-Mart put out of business years ago when they cropped up all over the interstate highways.”
In contrast to its experience in the U.S., Walmart entered the retail banking industry in Mexico in 2007, and here’s an update of what has happened there:
“After four years of operations, Banco Walmart opened its 1 millionth account on March 15, in one of its Mexico City branches. The account holder was rewarded with a $10,000 pesos deposit in their Banco Walmart savings account.
“Banco Walmart contributes towards improving the quality of life for families in Mexico, providing them with basic banking services at a low cost. In less than one year, we have given back more than $14.8 million pesos, in cash, to our customers using Banco Walmart cards in Walmart stores. We plan to open 62 new branches in 2011 (an increase of 24% over 2010) in order to bring this kind of service to more Mexicans nationwide. It is estimated that 70% of the population does not have access to bank services,” said Raúl Argüelles, senior vice president corporate affairs Walmart de México y Centroamérica.
“Since opening in 2007, Banco Walmart has generated more than 1,800 jobs throughout the country; it has received $1.34 billion pesos in deposits; it has granted $965 million pesos in credit through its Super Crédito credit card; and has supported $710 million in supplier development with more than 150 credit lines through the Credimpulsa program,” added Argúelles.”
MP: Maybe that’s just the type of reform that could help the U.S. banking system become safer, sounder and more efficient: some good ole competition from retail giant Walmart.