Walmart’s recent announcement of its store-to-store money transfer service is a good example of a disruptive business model—especially if you’re Western Union. The retail giant announced in April that it will let consumers send money to and from any of its stores in the U.S. and Puerto Rico for a fraction of what its competitors are charging.
If, as Walmart claims, 95% of Americans live within 15 miles of one of its stores, its new money-transfer service could have big implications for person-to-person or “social” payments.
Walmart’s pricing model is a disruptor. Transfers up to $50 within the U.S. will cost $4.50 and transfers up to $900—the maximum amount customers can send in a day—will cost $9.50 at Walmart. By comparison, a $900 transfer at Western Union would cost $76, according to a fee estimator on its website. In a statement, Western Union said domestic money transfers accounted for only about 8% of its revenues in 2013.
“The strategy is capturing people’s wallets as soon as they’re filled,” says Ben Jackson, senior analyst at Mercator Advisory Group, a payments consulting firm. “If a customer’s wallet is filled at a Walmart store, then it’s likely that customers will shop there too.”
President Barack Obama sent greetings Thursday to those celebrating International Credit Union Day. CUNA worked closely with the White House on the statement, and a number of credit union-friendly legislators also weighed in with the White House.
CUNA’s Strategic Communications Department teamed up with The Wall Street Journal this week on an infographic illustrating the differences between credit unions and banks. The graphic ran in print today, on International Credit Union Day.
The NCUA’s Tuesday announcement that it will repay the U.S. Treasury in full is a good sign for credit unions, said CUNA Chief Policy Officer Bill Hampel. The agency will repay the $1 billion outstanding balance before Oct. 31.