Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Filene report maps Walmarts banking moves
MADISON, Wis. (10/25/10)--Filene Research Institute’s latest report maps out the shape of Walmart’s retail financial services footprint in the U.S. and Mexico, going on to suggest that the world’s largest retailer has much more in store. The Blended Walmart Business Model, by Filene Research Fellow Robert Manning, knits together the many angles of Walmart’s involvement in banking services: from its 2007 charter travails to its foray into Mexican banking and to its long-term strategy of providing financial services--with or without a formal bank charter. In the report, Manning studies Walmart’s claims of low-price leadership in financial services and its retuned approach of offering financial products through partnerships in the U.S. and through an independent charter in Mexico. Highlights from the report include:
* Walmart still wants a bank charter. The potential from finance and penalty fees combined with interchange fee savings’ could easily garner more than $1.3 billion annually from Walmart’s payment card system and portfolio of customer credit card balances. * Walmart already offers a compelling range of benefits to potential banking customers: convenient locations and hours, welcoming atmosphere, familiar customer service, straightforward fees and fast transactions. * Walmart is targeting finance because it pays. The profit margins of Walmart’s traditional retail sales average 23.7% gross and 3.5% net, whereas the averages for comparable financial services companies range from 14% to 38% gross and 6% to 9% net.
Manning makes a case that Walmart’s plan is advancing even without a U.S. bank charter. Today, the retailer mainly offers ancillary financial products, but it may soon operate in the more traditional business model of deposits and loans, said Filene.
Other Resources

RSS print
News Now LiveWire
July 's Fed Bank's "FedFocus" has some interesting articles: incl cost/benefits of $1 currency 2 coin conversion ttp://tinyurl.com/nybmnhh
21 hours ago
Do you wish you were a News Now subscriber? Go here: http://t.co/7evfBSjeMx
21 hours ago
Financial education for student body key part of Altura #creditunion, UC-Riverside partnership #NewsNow http://t.co/Xp6OJd66o6
22 hours ago
.@VTcreditunions gains 200 new FB followers in just 2 wks to reach 1,000 http://t.co/I89xJcv4Jg
23 hours ago
.@CUNA is testifying on reg relief Tues,July 15 at 2 p.m. be4 Hs Fin Serv Subc. Here is the agenda and witness list: http://t.co/yBRhlmdqHt
1 Day ago