Wal-mart, working with Ria Money Transfer and American Express, announced on Tuesday enhancements to its Walmart2Walmart money transfer service, lowering fees on transfers and unveiling plans to launch a mobile service next month called Bluebird2Walmart Money Transfer Service, which will let users of Bluebird alternative checking and debit products send money for cash pick-up at Wal-mart store locations, according to a press release.
The big-box retailer said it already offers some of the lowest money transfer fees available, but beginning yesterday it cut costs to a point where customers will be able to save 20% to 90% on cash transfers versus what they will pay for using competing services.
When the Bluebird2Walmart service launches, Walmart2Walmart account holders will be able to visit Bluebird.com or use the Bluebird smartphone app to send money. Parties receiving money don't need a Bluebird account, but can pick up their funds at any Wal-Mart store within minutes of the online transfer.
Walmart2Walmart money transfers became available through the retailer's mobile app earlier this year, and it seemed like a fairly natural addition to a retailer that already offers many financial services through Walmart MoneyCenters and in-store customer service desks. Some of its other services include check cashing, bill pay, money orders, tax preparation services and pre-paid card programs, as well as Walmart.com Pay with Cash. Aside from these services, the retailer also offers its own Wal-Mart Pay digital wallet.
Financial services are part of the retailer's recipe to avoid the fate of brick-and-mortar retailers that didn't do enough to expand their traditional offerings and have begun to slide down the slipper slope of shuttering stores. Wal-Mart's bet on these services makes sense — they give customers more ways to spend at a retailer and can be fundamental customer loyalty tools that reinforce a retailer's brand value among its customers.
As Wal-Mart has discovered with Walmart Pay, the value of of some financial capabilities increases with the willingness to integrate with other platforms. Wal-Mart recently announced a deal to integrate Chase Pay with Wal-Mart Pay, and its arrangement with Bluebird shows a similar willingness that ultimately will expand the value and viability of Walmart2Walmart as a money transfer brand.
Some media reports are likening the company's decision to cut fees to Wal-mart's rollback pricing strategies that initiated price wars with competitors. Is Wal-mart's intent to extent its price war to financial services? As a mammoth company, it probably can afford to do so in order to take market share from other providers. It's a strategy that Wal-mart knows well, even if it's using it in a different market arena this time around.