Wal-Mart, AmEx to launch co-branded prepaid card
09 Oct 2012
Wal-Mart Stores and American Express will jointly launch a new prepaid card aimed at giving customers an alternative to checking accounts and debit cards, the companies said yesterday.
The card, called Bluebird, can be used at all establishments where American Express is accepted. It can also be used to withdraw cash from ATMs.
According to the companies, the card would have no monthly, annual or overdraft fees and no minimum balance requirement, although some ATM fees would apply. With the card customers will also be able to make deposits and pay bills using their smartphones.
Dan Schulman, group president of enterprise growth at American Express said,
users can deposit funds onto the Bluebird card in a variety of ways, including via regular direct deposits from a paycheck.
The card also allows direct remittance of money by customers to their account with the help of a smart phone app.
The joint effort is aimed at cutting the increasing fees associated with debit and checking services today, Schulman said. Customers who feel the pinch of across the board increase in fees by banks would find this appealing say analysts.
A recent report from Bankrate.com reveals that ATM surcharges -- the fee charged when customers use a machine that doesn't belong to their bank were up 4 per cent to a record high of $2.50.
According to Wal-Mart and American Express, users would only pay fees that were "clear, transparent and within their control," such as out-of-network ATM fees.
Daniel Eckert, vice president of financial services for Wal-Mart said, cusotmers told the retailer that there were tired of navigating a complex maze of do's and don'ts to avoid the ever-growing list of fees found on checking products.
He said Bluebird solved the problem, and helped customers affordably manage their everyday finances.
The Bluebird card is the latest offering in a range lower-cost prepaid cards aimed at a growing market that is looking for alternatives to checking accounts.
A number of big names have come out with prepaid reloadable plastic including Chase and Comerica, hip-hop mogul Russell Simmons with his RushCard and BabyPhat card.
Customers would pay $2 to add money from a debit card, though there are other ways of adding money onto the Bluebird card – including direct deposit and adding cash at Walmart – would be free.
There is a $2 fee to withdraw money if a customer does not go to ATMs in a specific network, after 4 November.
Users would be able to withdraw cash without a fee at MoneyPass Network ATMs with direct deposit.
According to Gerri Detweiler, director of consumer education for Credit.com, Bluebird fees were low and could make the card useful for someone who wanted a prepaid card to make online purchases or avoid checking account fees
The cards, that can also be linked to a checking or savings account or debit card would have more features added in the first quarter of 2013 – including more ways to deposit money and check-writing capabilities.
