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You can almost taste the irony of the hated, exploitative megacorp Walmart doing more to help poor people and put a check on cheque cashing places than any pol

You can almost taste the irony of the hated, exploitative megacorp Walmart doing more to help poor people and put a check on cheque cashing places than any politician ever.

nofinator 12y ago
The real problem with check-cashing places are payday loans. Low-cost checking accounts from Walmart won't stop those.
- bilbo0s 12y ago
  I don't know. It seems to me that a good entrepreneur would see the proverbial "writing on the wall" here. If I were a proprietor of a check cashing establishment... I would think that now might be a good time to cash out... before the writing gets any more clear. Alternatively, it might be good to seek out a service that you can offer that would be a complement to what you expect the Walmart service to evolve into. I don't know what that complement would look like... but I do sense that it is likely pretty profitable. In any case, the WORST thing they could do is sit still and assume business as usual. I mean, there is clearly a train coming... it's time to get out of the way.
lukeschlather 12y ago
This service is largely thanks to politicians banning opt-out overdraft fees on debit and ACH credit cards in 2010. But thanks to that change, you can get basically the same service from a credit union for a one-time $5 membership fee. If you're over the $500/month deposit bar, you should definitely be using a credit union. The whole idea of not offering checks except as the bank can issue them is a really good one though. I hope to see credit unions emulating that bit. (Just, not the $9/month fee, which is better than overdraft fees since it's predictable, but it's still exploitative since we're talking about people who are fundamentally bad at predicting their finances.)
sliverstorm 12y ago
Remember that Walmart is hated because it appears to be helping on the surface, but is in fact exploitative below the surface. So... remember that when you evaluate this new offering. I'm going to lean suspicious for now.
- MiguelHudnandez 12y ago
  There is no reason to be suspicious -- their motives are clear. Exploit the high-overhead banking economy with lower-cost offerings for their target demographic. Their target customers end up living a life filled with transactional cost. They might pay bills by buying money orders, get paychecks cashed at check cashing stores. On top of that, they can be time-poor, in that without a reliable car or without money for gas, they genuinely cannot get across town to a bank location, or travel an extra few miles to save money on some staple product. [1] So, right now, there is a significant cost associated with having no checking account. Therefore, if Wal Mart can bring them into their own system, any overhead they save the customers can come right back into the store. If they can offer the accounts without a financial loss, it's a no-brainer. Even if they have losses on the checking accounts, they might make it up by having physical bodies at Wal Mart more often each month. [1] "The High Cost of Poverty" http://www.washingtonpost.com/wp-dyn/content/article/2009/05/17/AR2009051702053.html http://www.washingtonpost.com/wp-dyn/content/article/2009/05... PS: Of course they could be evil, but there's no reason they would have to be.
  - sliverstorm 12y ago
    That's not the motive, that's the method. Cribbing from the article, one possible motive: In an uneven economic recovery, Walmart is also pushing to win back customers it is losing to lower-price retailers
    - spindritf 12y ago
      It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

You can almost taste the irony of the hated, exploitative megacorp Walmart doing more to help poor people and put a check on cheque cashing places than any politician ever.

nofinator 12y ago

The real problem with check-cashing places are payday loans. Low-cost checking accounts from Walmart won't stop those.

bilbo0s 12y ago
I don't know. It seems to me that a good entrepreneur would see the proverbial "writing on the wall" here. If I were a proprietor of a check cashing establishment... I would think that now might be a good time to cash out... before the writing gets any more clear. Alternatively, it might be good to seek out a service that you can offer that would be a complement to what you expect the Walmart service to evolve into. I don't know what that complement would look like... but I do sense that it is likely pretty profitable. In any case, the WORST thing they could do is sit still and assume business as usual. I mean, there is clearly a train coming... it's time to get out of the way.

lukeschlather 12y ago

This service is largely thanks to politicians banning opt-out overdraft fees on debit and ACH credit cards in 2010. But thanks to that change, you can get basically the same service from a credit union for a one-time $5 membership fee. If you're over the $500/month deposit bar, you should definitely be using a credit union. The whole idea of not offering checks except as the bank can issue them is a really good one though. I hope to see credit unions emulating that bit. (Just, not the $9/month fee, which is better than overdraft fees since it's predictable, but it's still exploitative since we're talking about people who are fundamentally bad at predicting their finances.)

sliverstorm 12y ago

Remember that Walmart is hated because it appears to be helping on the surface, but is in fact exploitative below the surface. So... remember that when you evaluate this new offering. I'm going to lean suspicious for now.

MiguelHudnandez 12y ago
There is no reason to be suspicious -- their motives are clear. Exploit the high-overhead banking economy with lower-cost offerings for their target demographic. Their target customers end up living a life filled with transactional cost. They might pay bills by buying money orders, get paychecks cashed at check cashing stores. On top of that, they can be time-poor, in that without a reliable car or without money for gas, they genuinely cannot get across town to a bank location, or travel an extra few miles to save money on some staple product. [1] So, right now, there is a significant cost associated with having no checking account. Therefore, if Wal Mart can bring them into their own system, any overhead they save the customers can come right back into the store. If they can offer the accounts without a financial loss, it's a no-brainer. Even if they have losses on the checking accounts, they might make it up by having physical bodies at Wal Mart more often each month. [1] "The High Cost of Poverty" http://www.washingtonpost.com/wp-dyn/content/article/2009/05/17/AR2009051702053.html http://www.washingtonpost.com/wp-dyn/content/article/2009/05... PS: Of course they could be evil, but there's no reason they would have to be.
- sliverstorm 12y ago
  That's not the motive, that's the method. Cribbing from the article, one possible motive: In an uneven economic recovery, Walmart is also pushing to win back customers it is losing to lower-price retailers
  - spindritf 12y ago
    It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.