Wal-Mart Stores Inc.
) has decided to launch a new, lower-priced money transfer
service in partnership with Ria Money Transfer, a subsidiary of
electronic payments provider
Euronet Worldwide Inc.
) with an aim to expand its financial services business.
The new Walmart-2-Walmart Money Transfer Service will start
from Apr 24 and, as the name says, will let customers send and
receive cash from family members and friends from one Walmart
store in the U.S. to another. The fee is $4.50 for a transfer of
up to $50 and $9.50 to send an amount of $800-$900. However, its
competitors, in comparison, charge in the range of $4.75-$5.00
for a money transfer of up to $50 and around $57-$76 for
transferring an amount of $800-$900.
Amid the dominance of traditional players in the industry,
Walmart's new lower priced money transfer service is expected to
create a stir in the financial service market. The new service
will generate incremental savings for all those millions of
customers who do not have bank accounts. As far as Walmart is
concerned, it is yet another initiative by the company to boost
its finance revenues and revive its store traffic, which grappled
with declining same-store sales for four straight quarters in
Walmart already offers other money services such as check
cashing, bill pay, money orders and tax preparation services, as
well as industry-leading pre-paid card programs though Walmart
MoneyCard and Bluebird. Last year, Walmart U.S. generated about
1% of annual sales from financial services.
Walmart's shares went up 0.6%, while Euronet shares jumped
4.05% after the announcement. However, the news to launch the new
money transfer service pushed shares of other money transfer
companies. Shares of
The Western Union Co.
) declined by 4.9%, while those of
MoneyGram International Inc
) plummeted 17.7%.
Walmart carries a Zacks Rank #4 (Sell).
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