Wal-Mart To Provide Domestic Money-Transfer Services

Wal-Mart Stores, Inc. (WMT) announced yesterday that it is launching its own money-transfer service on April 24, 2014. The service, dubbed Walmart-2-Walmart, offers direct competition to The Western Union Company (WU) and MoneyGram International Inc (MGI), two dominant players in the money transfer business. At the same time, its aim is to broaden the financial services currently offered to low-income customers.

The world’s largest retailer announced that the money-transfer service for its low-income customers will cost up to 50% of the fees charged by traditional players in the money-transfer business. The company, which has partnered with Ria Transfer, a subsidiary of Euronet Worldwide, Inc. (EEFT), will be offering its Walmart-2-Walmart service in all 4000+ of its stores, located all over the US. Wal-Mart’s customers will be able to transfer up to $50 for a flat fee of $4.50. Amounts over $50 and up to $900 will cost $9.50 per transaction. The dramatically low prices offered by Wal-Mart may initiate a pricing battle in the money-transfer business; according to fee estimates provided on Western Union’s website, a domestic money transfer of about $900 can cost as much as $76 for a single transaction. On the other hand, estimates on MoneyGram’s website indicate that the same transaction can cost about $73.

Wal-Mart’s comparable store sales (CSS) declined for the fourth consecutive quarter in the first quarter of its 2014 fiscal year (1QFY14), and the company is now aggressively trying to increase its foot traffic. The Walmart-2-Walmart service may compensate for some of the declines in the company’s CSS, as the service will give consumers yet another reason to shop at its stores. Daniel Eckert, Wal-Mart's Senior Vice President of Services, stated that the company ventured into the money-transfer business to help its customers save when transferring money. He did, however, acknowledge in a conference call on Thursday that the program could bring more foot traffic: “Walmart-2-Walmart leverages our existing footprint and the large-scale systems that our company can bring to bear to enable a low-cost service such as this.”

 

Hmm, it's a bold move for Wal-Mart I think. Even if their sales have declined, they still have a huge amount of foot traffic, and being able to do this sort of thing at the back of the Wal-mart you're already in is bound to be appealing for a lot of people. Bold move, but I think it'll pay off for them no doubt.

 

I do not have a Walmart around me so the service would not be very helpful. I wish Target would jump on this band wagon, or even PayPal for that matter. I hate having to wait up to 2-3 days to get my money.

 

I really like the idea that they are making the fees lower than its competitors. People really hate to pay those high fees to transfer money. I have been a victim of the ridiculousness of Western Union on many occasions.

 

I think this will help them corner the market. Western Union is very entrenched, but Wal Mart would barely have any additional overhead in doing this, already has a large network of locations, and an unbeatable amount of foot traffic. Western Union will have to make some serious changes to their business plan, locations, and fees to stay competitive now.

 

It was my impression that Walmart was everywhere?

Also, Paypal used to have a way of getting your money sent early, but you had to pay a little extra for it. Now it's instantaneous from paypal to paypal, but takes a few days to transfer from paypal to bank account.

 

Yeah Right it takes times to cover it but walmart is giving best service i hope it would be better day by day in future....