Galloway reckons that Wal-Mart’s new
debit card "is simply a deposit account by another name" and that
Wal-Mart has thereby managed to become a bank via the back door, as it were.
This is ridiculous. There’s a world of difference between Wal-Mart selling
prepaid Visa cards and Wal-Mart becoming a financial institution. For one thing,
Wal-Mart isn’t actually issuing the cards: instead, it’s gone into partnership
with GE Money and Green Dot. And in any case it’s not deposits where banks make
their money – it’s fees and interest charges. And the Wal-Mart MoneyCard
has neither of those.
As for the MoneyCard being a deposit account, that’s just silly. You can’t
write a check on a MoneyCard. You can’t wire money to it; you can’t wire money
from it. You don’t get free statements. There aren’t any free ATMs you can use,
and each ATM withdrawal will cost you $1.95 minimum. You can’t deposit money
into it without paying a "reload fee", and you certainly
can’t deposit a personal check into it, even if you are willing to pay the fee.
If you decide you’d be better off with a real deposit account, you can’t take
your money out without paying an unspecified "liquidation
fee". The card has an expiry date, after which it can’t be used. You
can set up regular payments from the card, but once you’ve done so, it’s really
hard to stop them:
If you have told us in advance to make regular payments using your Wal-Mart
MoneyCard, you can stop any of these payments. Here’s how: Call us at
(877) 937-4098, or write us at Our Mail Address, in time for us to receive
your request 3 business days or more before the payment is scheduled to be
made. If you call, we may also require you to put your request in writing,
to provide us with a copy of your notice to the payee revoking the payee’s
authority to originate debits to your card, and get it to us within 14 days
after you call. If we do not receive the written confirmation within 14 days,
we may honor subsequent debits to your Wal-Mart MoneyCard. We will charge
you $5 for each stop-payment order you give.
And how much does all of htis cost? $8.94 up front, plus $4.94 per month.
Frankly, this is a rip-off on multiple levels. And part of the reason is precisely
that Wal-Mart can’t make the kind of profits that normal banks can,
from providing credit services. Wal-Mart’s customers would be much better served
by a Wal-Mart checking account, were such a thing allowed, than they are by
this dreadful product.