Wal-Mart Stores Inc. is pushing deeper into the financial services arena, rolling out a cheap new way for customers to transfer money.
Called Walmart-2-Walmart, the service allows people to transfer up to $900 a day to and from any U.S. Wal-Mart store via Wal-Mart's new partnership with Ria Money Transfer. It launches in stores this coming Thursday.
Customers will pay $4.50 to transfer up to $50, and pay $9.50 for all transfer sums above that. That's significantly less than what MoneyGram and Western Union charge for amounts above $50, according to Wal-Mart's figures.
The nation's largest retailer said that it's responding to customer complaints about high and confusing fees. Wal-Mart already offers money transfer services through longtime partner MoneyGram International Inc. as well as Xoom Corp., so Wal-Mart appears to be undercutting its own existing service. Wal-Mart's news release said it's challenging the status quo to drive down prices.
Shares of MoneyGram and Western Union took a dive on the news, with MoneyGram shares plunging 18 percent.
A Wal-Mart spokeswoman said it will continue offering the other services and called them a "great option" for transferring money to other countries, or to non-Wal-Mart locations.
"We're interested in providing our customers choices," said Molly Blakeman, a spokeswoman for the Bentonville, Ark., retailer.
The size of the domestic money transfer market remains something of a mystery, but experts agree it is a small portion of the tens of billions of dollars people in the U.S. send abroad each year. However, it's a service that is vital for many low-income households, those who don't use banks and military families.
