Walmart is aiming to capture the hearts and wallets of “the great unbanked” with a new mobile banking service.
For 20 years, Walmart 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 Walmart banned as a bank.
Regardless of how you perceive Walmart, this is a shame. Other countries have allowed retailers to go into banking and they enjoy lower cost services and enjoy a big emphasis on customer service for having done so.
But now with the announcement of Go Bank, Walmart finally has a way to offer banking to the public in a joint venture with Green Dot.
Why you should care about Walmart’s Go Bank
There are 2 reasons in particular why I like the idea behind Go Bank.
First, the banking industry has behaved like a bunch of slimy 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 5 years.
There’s no due process and no explicit explanation of what you’ve allegedly done wrong when it comes to ChexSystem. The banks have resisted having any due process, even in the event you’re wrongfully on the list because of a clerical error.
But here’s the thing: Go Bank won’t discriminate against you if you’ve been banned by ChexSystem! They will let you open a checking account anyway! (Back office operations are being handled by Green Dot, and they are the ones screening people for accounts, not Walmart.)
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Second, very few banks offer truly free checking anymore. Walmart 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 Walmart offer a network of tens of thousands of ATMs you can use fee-free . And of course, you’ll have access to branches in Walmart stores all over the country.
I hope others in retail and supermarkets will do what Walmart has done. This is great news even if you don’t want to do business with Walmart.
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The great unknown is this: Walmart 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.