Wal-Mart's Moneycenters, A Winning Idea

Wal-Mart (WMT) announced today it will open 1,000 Wal-Mart MoneyCenters covering a quarter of its stores by the end of 2008. The company will also broaden its menu of financial products and services, beginning with the launch of the Wal-Mart MoneyCard, a reloadable prepaid Visa rolling out nationally with GE Money and Green Dot.

Wal-Mart says it's MoneyCenters "will assist customers who are outside mainstream banking with convenient, nationwide access to low-cost money services, including check cashing, money orders, bill payment and money transfers. Together with the
Wal-Mart MoneyCard, which provides many of the advantages of a checking account
in your pocket -- an easy, safe and convenient way to manage money, pay bills and
make purchases."

Wal-Mart MoneyCenters
*Convenience -- One-stop shopping with extended hours, seven days a week
*Safety -- Well-lit, safe and secure area to cash checks, pay bills and transfer money
*Savings -- With Wal-Mart's every day low pricing, customers can save 25 to 50 percent or more over other leading money service providers.

Wal-Mart MoneyCard
*Convenience -- Use at all locations where Visa(R) is accepted and at ATMs worldwide. Shop and pay bills by phone or online, pay at the pump.
*Safety -- No need to carry large amounts of cash and funds are protected if card is lost or stolen. Online access to track your activity.Daily balance alerts on your cell phone or email
*Savings -- No over limit fees. Designed so customers can minimize or avoid usage fees


Wal-Mart currently conducts more than two million money services transactions
each week. Last year, customers using these services saved an average of
$450 per year (or almost $40 per month). With the opening of additional Wal-Mart
MoneyCenters, the total savings are expected to grow dramatically this year, putting
over $320 million back into customers' pockets.

This is a natural move for Wal-Mart. By giving their stores more one stop functionality, they are creating additional traffic. More traffic will inevitably lead to more sales and profits. There is also a loyalty element to this that is hard to put a price tag on. People who are saving money via these transactions at Wal-Mart are more likely to spend that savings there. I don't see a scenario where these people go to Wal-Mart, cash a check and then go someplace else to shop, won't happen. Both sides here come out a winner.

This is a great move for Wal-Mart and hopefully a sign of more to come now that they seem to have taken their foot off the accelerator with their growth obsession.