WalMart’s Debit Card: Targeting the Poor
Walmart and American Express have teamed up to provide a debit card program for Walmart shoppers. The card will be called bluebird, as in “bluebird of happiness.”
Their targeted market is poor people who do not have bank accounts. No one in the banking industry wants them. So, Walmart spotted an opportunity.
A poor person can deposit money in his account at a Walmart store. No other retail store offers this service yet. So, if a poor person wants the convenience of a plastic card, he can get it. He need not carry currency.
He will go to Walmart to deposit money. He will also spend some cash there. Count on it. Walmart surely is.
It’s also a smart move for American Express. AmEx credit cards are not used much. They charge high transaction rates to retailers, so stores accept MasterCard and Visa instead. AmEx has been out of the money for decades.
This way, AmEx will finally get an entry point to the bottom of the market. It has always catered to the top. This is a major repositioning for Amex. But Walmart’s name will be on the card. It won’t dilute the AmEx brand.
This is free market competition at work. The beneficiary is the customer. A family that could not get a bank account can now get one. This card will not encourage debt. It will encourage thrift. Users will learn about bank statements. They will be able to follow the money.
I will be watching for in-store advertising of this product. I want to see how Walmart lets customers know about the opportunity.
It will be interesting to see if this project is profitable for both companies. I think it will be.
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Published on October 10, 2012. The original is here.
The strategy has worked. There is a Walmart edition of the card: MoneyCard. There is an American Express version: Serve.