Is Wal-Mart's Bluebird Brilliant or an Invitation to the Slippery Slope?

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Don't look now, but Wal-Mart is getting into the banking business.

The retail giant has recently teamed up with American Express to offer a new account called the "Bluebird." Typical of the famed discounter, the account offers customers no minimum monthly balance requirements, no monthly maintenance fees, no annual fees, and no activation fees.

Bluebird customers can access their money for free using one of more than 22,000 ATMs, or simply be charged $2 if they are not part of a direct deposit program.

Is Bluebird too good to be true?

Yes and no.

On one hand, I think this is a brilliant alliance of two very different partners. Wal-Mart is obviously critical to mainstream America, so moving up the ladder to American Express gives them increased "oo mph" and brand projection.

It also allows the Bentonville, AR-based behemoth to tie up with a stable financial provider that's relatively unscathed by the financial crisis.

With regard to Amex, somebody in New York had a brilliant brain cramp when they hatched this union.

The company has always wanted to move into middle America but has been hamstrung on a variety of levels.

The Bluebird accounts give American Express unprecedented marketing reach into an entirely new customer profile while bypassing the traditional competitive credit card channels. At the same time, it also offers an entirely new source of capital.

While there are a good many details yet to be disclosed, I fully expect the Bluebird to be a win for consumers.

Not only is it going to create an entirely new class of "bank" but it potentially end runs the iron- fisted grip traditional financial institutions have had on consumers while also reducing the risks associated with credit markets. You can bet banking lobbyists will hate it.

Why Banks Already Hate Bluebird

And that brings me to the "no" part.

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