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October 10, 2012

Wal-Mart offers bank account alternative with American Express

Wal-Mart Stores, the world's largest retailer, has been adding financial products for people who don't have bank accounts. Now it's targeting those who do.

A prepaid debit card called Bluebird, created through a partnership with American Express, will be available in more than 4,000 U.S. Wal-Mart stores and online next week, the Bentonville, Ark.-based company said Monday in a statement. Services include direct deposit, automatic bill pay and remote check capture using a smartphone application. The card has no monthly or annual fees, and doesn't require a minimum balance.

"Bluebird is designed as a checking and debit alternative," Daniel Eckert, vice president of financial services for Wal-Mart U.S., said in an interview. The product is for "those customers who are waking up to the skyrocketing costs of having a checking account."

Wal-Mart abandoned plans to start its own bank in 2007 amid opposition from legislators and financial-services companies. At the time, the retailer's application to open a so-called industrial bank in Utah would have enabled it to process credit- card and debit card transactions internally.

The retailer has been adding financial services and products to boost store visits in the U.S. after so-called same- store sales declined for two years through July 2011, according to Matt Arnold, an analyst for Edward Jones & Co. in Des Peres, Mo. Bluebird will probably appeal to the low-income consumers Wal-Mart depends on because they can often only afford basic accounts without such features, he said.

 "There's still a huge piece of the population that doesn't enjoy that, and for them this could wind up being a better alternative," said Arnold. The card appears to be created to increase store traffic and relevance rather than profit, he said.

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