Wal-Mart has made big waves with its pre-paid debit card. With over 4,000 locations that have a huge amount of traffic, any effort by Wal-Mart to offer financial products is instantly a serious threat to banks. The $3 monthly fee for their debit card is highly competitive at a time when checking account fees have been rapidly increasing. As a result, Wal-Mart has been stealing clients from traditional banks.
A recent American Banker article highlights how some credit unions have started to “embrace this trend by modifying their ATMs to sell fee-free stored-value cards.” More banks should test these types of strategies to adapt to the rapidly evolving environment and compete against new threats like Wal-Mart.
This particular strategy may not be the silver bullet to win back or retain customers. (more…)