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Walmart Flat Rate Bank

11/09/2021 10:30 AM ET

Walmart BankAmericans say they are fed up with banks. Now there is a surprising bene­ficiary: Walmart Stores Inc.

Jeff Cardone, a 26-year-old factory worker, said he dumped his bank account because he felt like he was being nickeled and dimed by fees. His new payday ritual includes a trip to the Walmart here in the mountains of northeastern Pennsylvania.

“It’s cheaper,” said Cardone, who was charged a flat fee of $3 to cash his paycheck. Many check-cashing stores keep a percentage of the check, which tends to be higher.

The Walmart here has a teller in a brightly painted Money Center near the entrance, like more than 1,000 other Walmarts across the country. Customers can cash work and government checks, pay bills, wire money overseas or load money on to a prepaid debit card. At Walmarts without dedicated Money Centers, the financial services are available at the customer service desk or at kiosks.

Four years ago, Walmart abandoned its long-sought plans to obtain a federal bank charter amid opposition from the banking industry and lawmakers. Ever since, Walmart has been quietly building up a la carte financial services, becoming a force among the unbanked and “unhappily banked,” as one Walmart executive put it.

“We have a tremendous opportunity ahead of us, and it’s largely due to what you’re seeing around us happen in the industry,” said Daniel Eckert, head of Walmart Financial Services. “We’re not a bank, but we can serve a lot of types of functions you would see someone go into a bank for.”

Walmart says it has no intention of reviving its plans to become a full-blown bank that could make loans and accept federally insured deposits. But the retailer has obtained bank charters in Mexico and Canada, leading some bankers to suggest the company is laying similar groundwork in this country.

Jennifer Tescher, chief executive at the Center for Financial Services Innovation, which focuses on finding financial services for those who are not well served by banks, said Walmart brought much-needed competition — and lower fees all around — to financial services.

For Walmart, which has been struggling with sales and foot traffic, turning stores into quasi-banks has one indisputable advantage: more shoppers with money in their pockets.

“I cashed my check,” said Barbara Reif, “and now I’m going to go shopping.”

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