Hooray For Wal-Mart Banking!

As I read The Case for Smal Government blog, a Wal-Mart Banking post really appealed to me. The author had a great point. He basically said that if Wal-Mart could offer banking what it has offered the world of retail, than it would be a great thing. I completely agree! Finance is my field, and I don't feel threatened by Wal-Mart's possible emergence in the banking world. Perhaps they could bring something to the table lthat traditional banks have not. It remains to be seen what will ultimately come to pass from Wal-Mart in terms of its blending of banking and retail, but the future looks bright.


Jake said...

I work in banking and there is a lot of concern about Wal-Mart's possible entrance into this market. It doesn't bother me because they are a long way from being able to really enter the banking industry. I don't disagree; however, that a little more competition never hurts.

Billy said...

I welcome Wal-Mart's application as an ILC in Utah. I think that it isn't going to be successful. Because ILC's are legally prohibited from entering into demand-based or transaction-based deposits (such as checking accounts, demand savings accounts, and lines of credit), Wal-Mart will not be able to do business with its typical client-base. The typical Wal-Mart client is not going to go in and open a 12-month CD. They want lines of credit and checking accounts. Even if Wal-Mart were allowed a charter to process credit card payments, it wouldn't be able to advance much further than that.

Hannah said...

Wal-Mart becoming an industrial bank is not a threat to traditional commercial banks. However, it is the camel's head in the tent. I would not be surprised if Wal-Mart does not pursue full commercial status shortly after becoming an industrial bank.

If they do, my only concern is financial services will become a commodity. As we know in a commodity market the lowest price always wins. Only Wal-Mart and Credit Unions with their tax exempt status will be able to compete in that type of environment.

Is it better to sacrafice service for cheaper prices? (i.e. low interest rates) America already has a negative savings rate and we're up to our eyeballs in debt. Don't we need some guidence?

Banking as we know it will have to evolve. It will be interesting to watch what happens in that industry. (Especially since I work at a commercial bank.)

Dr. Tufte said...

-1 on Blake's post for a spelling error.

-1 on Hannah's comment for a spelling error.

I think all the points here are right on the money.