Wal-Mart (NYSE:WMT) Doesn't Need Bank Charter

Wal-Mart Money Centers

It could be that the refusal to be offered a bank charter is one of the best things to have happened to Wal-Mart (NYSE:WMT), as it forced them to look at other ways to financially serve their customers, and as usual, they've come up with a highly profitable one.

Most of the customers using the approximate 1,000 "Money Centers" offered by Wal-Mart are those that don't use banks. The giant retailer is now looking to expand those Money Centers to another 500 stores, bringing the total to 1,500, or about half the number of stores in the United States.

The money centers have become a very lucrative trade for Wal-Mart, and is highly profitable, as there's little costs other than those handling the transactions, which amount to between 3 to 5 million a week on a national basis.

Costs are also low to put the financial units in a store as well, making them a quick-producing profit machine.

The primary business of the money centers is to help customers do the day-to-day business of cashing their work or government checks, bill-payments, transferring of money or loading up a prepaid debit card.

All of the small fees paid for the services add up to huge business across the nation, and promise to be another winner for Wal-Mart.

As far as a bank charter, Wal-Mart no longer has the desire to pursue that avenue, as they know with their base customer they've tapped into the main well of revenue in this particular part of their lives, and a bank charter would do nothing to add to the services they want or seek.

Wal-Mart Money Centers