11/08/2011 - Americans fed up with big bank fees are closing their accounts and marching over to … Walmart? It’s true; the mega-retailer has been steadily growing its services for the unbanked, such as cashing checks and selling reloadable prepaid debit cards. Even detractors admit that Walmart’s money services cost less than traditional check-cashing storefronts, but is it a good idea for people to do their personal banking with a company that isn’t subject to any kind of banking oversight? More than 1,000 Walmart stores across the country now include Money Centers, where customers can do things like cash a paycheck of up to $1,000 for a flat fee of $3, buy a $3 prepaid debit card, pay bills or wire money overseas, according to the New York Times. Many of the customers interviewed by the newspaper said they were driven to Walmart’s alternative by unexpected bank fees.
The article says the purchase cost and monthly fees for the prepaid cards are about half of what other retailers charge. The $3 check-cashing fee is less than the more than one percent (and sometimes up to 5 percent!) other check-cashing businesses charge.
These responses correlate with a study conducted by the Pew Charitable Trusts, which found that the primary reason people leave mainstream banking is hidden or unexpected fees. Pew recommends that banks adopt a standard fee disclosure form, but for now, consumers are on their own. When they get nickel-and-dimed, they get frustrated and turn to outlets like Walmart.
Read the full article, Would You Bank at Walmart?, on Time's Web site.