Wal-Mart is aiming to capture the hearts and wallets of “the great unbanked” with a new mobile banking service.
For 20 years, Wal-Mart has tried to go into banking. But the banking industry, terrified of competition from a low-cost provider, used all its political muscle to get the company banned as a bank.
Regardless of how you perceive the retailer, this is a shame. Other countries have allowed retailers to go into banking and residents enjoy lower-cost services and an emphasis on customer service for having done so. But now with the announcement of Go Bank, Wal-Mart finally has a way to offer banking to the public in a joint venture with Green Dot.
There are two reasons why I like the idea behind Go Bank. First, the banking industry has behaved like a bunch of mobsters with how they treat the unbanked. If you find yourself on the ChexSystem bad boy list, you’re typically banned from opening a new account for five years. There’s no due process and no explicit explanation of what you’ve allegedly done wrong. But here’s the thing: Wal-Mart doesn’t care if you’ve been banned.
Second, very few banks offer truly free checking anymore. Wal-Mart will have free checking, no minimums, no overdrafts, and no NSFs fees through Go Bank. There is a monthly charge of $8.95, but that gets waived if you set up direct deposits totaling at least $500 in a given month.
Go Bank and Wal-Mart offer a network of tens of thousands of ATMs you can use fee-free. And of course, you’ll have access to branches in Wal-Mart stores all over the country.
Wal-Mart is not known for its great customer service. How will they handle customer service in banking? I have no answer; the marketplace will have to answer that.
– Clark Howard — Save More, Spend Less, Avoid Rip-offs — for the Atlanta Bargain Hunter blog
Consumer expert Clark Howard’s column appears here each Thursday in conjunction with Deal Spotter, a weekly print section in The Atlanta Journal-Constitution. Find more answers to your consumer questions at Clark’s website.