Wal-Mart intends to offer a money transfer service in a bid to keep its customers buying more from its store.
The largest retailer in the world announced a new money transfer service today, which it says will reduce fees by as much as 50% compared with competition. Dubbed Walmart-2-Walmart, the service will be implemented in conjunction with Ria Money Transfer, a Euronet Worldwide subsidiary.
According to Bloomberg, shares of similar money transfer firms MoneyGram and Western Union plunged almost immediately on the developments.
Wal-Mart customers will be able to start using the service on April 24. The service allows them to move as much as $900 to and from the retailer’s US stores, which are more than 4,000.
The move is quite significant and could be something of a paradigm shift in the industry, potentially triggering a pricing battle.
With the service, up to $50 is transferable for a $4.50 service fee while it will cost $9.50 to move $900.
Wal-Mart said that other similar service providers may charge up to $70 to aid the transfer of less than $1000.
As USA Today reports, Western Union’s New York transfer fees for $900 as indicated on the firm’s website are in the range of $20 if a bank account is used and $85 using a credit or debit card.
The latest developments expand Wal-Mart’s financial provisions for its customers, especially the unbanked. The firm’s other financial services include tax preparation and prepaid debit cards.
MoneyGram wasn’t immediately available for comment. However, Western Union told The Associated Press via an email statement that, “Our retail product and service offerings today are already quite diverse. The company is well positioned in the U.S. domestic money transfer space, having offered a fee of $5 for $50 since 2009.”
Wal-Mart is trying to bolster foot traffic to its brick and mortar stores. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at email@example.com