So you think Wal-Mart is only a giant retail store that sells just about everything? Think again. According to MyBankTracker, Wal-Mart will be launching a bank in Canada very soon with a Wal-Mart credit card as well as they are a full licensed bank in that country.
Apparently back in 2016 the company tried to get into banking in US but was unable to secure a card processing center in Utah that would handle the store credit card services.
Bad for Banks
If Wal-Mart starts offering financial services directly, they can be a huge threat to US banks specially the small banks and credit unions. Wal-Mart already is into check cashing business that cashes checks for a very small fee cheaper than other paycheck advance stores. Also they have a money card where many people use to take a payday loan. Offering other banking services, in opinion of some, could trigger unfair competition that could put local banks and financial institutions offering the similar services out of business or push them to corner where they have to cut costs and lay people off.
Good for Consumers
If Wal-Mart becomes an actual bank with its own credit cards, as opposed to their current model where they partner up with other financial institutions to do that, then in theory that could costs for consumers as Wal-Mart can offer its products even at lower price. Credit card and debit card fees are very expensive for merchants even the ones as big as Wal-Mart. Also charge backs and fraudulent credit card activity ends up costing retailers the most. By becoming bank Wal-Mart also hopes they can reduce these problems.
That means consumers can buy items for cheaper from Wal-Mart, and perhaps even take loans including payday loans for cheaper. That would cause other banks and lenders to be competitive to offering more affordable solutions to their consumers and at the end consumers will win.