Walmart is teaming up with one of the nation’s most affordable banking systems to provide checking account services to low-income Americans.
Green Dot Bank has created a partnership with the retail giant that would make GoBank checking account products available to customers in need of zero overdraft penalties, minimum balance fees, monthly charges, and bad check fees.
GoBank’s eligibility process seems to be pretty simple.
Most applicants who can provide legitimate identification will be cleared without going through a credit score background check. Once a person has passed verification procedures, they can set up a starter kit priced at $2.95. Customers who directly deposit $500 per month will have their monthly membership cost of $8.95 waived.
The account features will also offer a wide range of services, including a MasterCard debit card and access to 42,000 ATMs. Yet, what makes it even more appealing for low-income customers is that it’s practically free.
CEO Steve Streit of Green Dot Corporation said in a statement on the Walmart’s website how most basic checking accounts are usually associated with high fees, some ranging from $218 to $314 a year.
However, he’s for certain that GoBank will be the ultimate cure to this particular banking problem.
“No other checking account makes it this easy and affordable to manage your everyday finances,” said Streit, who is also chairman of Green Dot Bank. “GoBank is breaking down the barriers to traditional banking and brings the benefits of a FDIC-insured checking account that’s loaded with features to a large segment of Americans.”
Banks like Bank of America have a similar banking system called SafeBalance account, in which they only charge a monthly fee of $4.95 and a zero overdraft fee.
Although there are other alternatives available to the poor, Walmart’s GoBank features a number of compelling perks:
1) Direct deposit can be done at any Walmart cash register.
2) GoBank customers can send or transfer funds to each other via text message and/or email.
3) The “Fortune Teller” app evaluates a customer’s planned expenses and informs them beforehand if they’re spending over their budget.
4) With an employer’s approval, payroll can be sent to a customer’s account prior to the scheduled payday.
In addition to GoBank, Walmart already offers other financial services such as bill-pay and check cashing. The company also facilitates independent banking establishments within a number of store locations.
While Walmart claims that its new venture will benefit those who can’t afford bank fees, there may be a hidden agenda behind the GoBank checking account.
According to Bloomberg, at the start of 2013 Wal-Mart Stores Inc. was struggling to keep merchandise replenished after cutting jobs and staffing hours. The number of new stores opened across the U.S. overshadowed the number of available warehouse and in-store workers needed to sort, deliver, and restock merchandise. As a result, growth in sales started to fall drastically. Business analysts say, however, that this had been an ongoing issue since 2011.
A new banking system could be the solution to the plummeting profits experienced over the last six quarters.
“The goal here is to get [customers] in the store and boost traffic and sales in the store,” said Chief Financial Analyst Greg McBride of Bankrate.com.
The checking account product is scheduled to launch by late October.