Wal-Mart is offering another incentive toits customers to spend more time at its stores. The world's largest retailer introduced a new money transfer service that it says will cut fees by up to 50 per cent compared with similar services elsewhere. The Walmart-2-Walmart service is being rolled out in partnership with Ria Money Transfer, a subsidiary of Euronet Worldwide Inc.
Shares of MoneyGram and Western Union plunged almost immediately after the announcement. The service, which will be available starting April 24, allows its customers to transfer up to $900 to and from more than 4,000 Wal-Mart stores in the US. It's a huge footprint that could reshape that industry and is likely to set off a pricing battle.
Customers can transfer up to $ 50 for a $4.50 service fee and up to $900 for $9.50. Comparable services elsewhere cost up to $ 70 when transferring less than $1,000, according to Wal-Mart. Western Union on its website puts the price of transferring $ 900 in New York between $20, if using a bank account, to $ 85 if using a credit or debit card.
Wal-Mart is creating an expanding menu of financial offerings for customers, particularly for those with limited exposure to banks. Wal-Mart already offers prepaid debit cards and tax preparation services. Shares of MoneyGram International Inc., which could get hit the hardest, fell more than 15 per cent to $15.25 in midday trading.