In the US, Wal-Mart Stores is taking another leap into the banking world, announcing a prepaid card and debit account with American Express that will give low-income consumers access to features like smartphone deposits.
The move is intended to strengthen both companies’ position in the prepaid card market — which, unlike credit and debit cards, is largely unregulated and has far fewer consumer protections.
The account is called “Bluebird” and the companies are positioning it as an option for people turned off by bank fees.
Bluebird means prepaid card holders can have access to features that are usually associated with credit cards, like American Express’s customer service, roadside assistance and mobile banking. For Walmart there is the potential to reach the underbanked – customers who use few, if any, bank services. This market has potential for being a $45 billion market.
For the Bluebird account, customers can sign up free online or via mobile phone, or pay $5 in a Walmart store. They receive a card stamped with the American Express logo, which they can use anywhere American Express is accepted. They can set up direct deposit for paychecks and deposit other checks by taking a mobile phone picture of them. And they can withdraw cash. The companies do not perform a credit check before creating an account.
There is even a really useful smartphone app that allows you to deposit a cheque simply by taking a picture.
These innovations are changing the face of prepaid in the US and provides an insight into how the concept will change in our country as well. For now, the Bluebird card offers a great option for the average American prepaid consumer. We’re interested to see whether this will continue to South Africa when Walmart arrives and its impact on the local landscape.