NEW YORK (AP) ― Wal-Mart is the latest company to get rid of fees that traditional banks charge customers who don’t have enough money in their accounts to cover purchases.
The world’s largest retailer said Wednesday that it teamed up with Green Dot Corp., a company known for its reloadable prepaid cards, to bring mobile checking accounts to its shoppers. The accounts won’t charge overdraft and bounced-check fees.
It’s the latest attempt to offer banking services that cater to cash-strapped Americans who are still struggling in the economic recovery. Bank of America and Citibank both launched checking accounts this year that don’t charge overdraft fees, which can normally cost up to $35 per transaction.
The moves come as overdraft fees, which occur when a customer doesn’t have enough cash in their account to cover a purchase, have come under increasing scrutiny by regulators in the past few years.
In 2010, banks were required to get written approval from customers to provide overdraft protection, which allow balances to go below zero. But those that opt for overdraft coverage are still paying high fees: Some customers at large banks can pay, on average, almost $260 a year in overdraft fees, according to the Consumer Financial Protection Bureau.
Green Dot’s account, called GoBank, has a monthly fee of $8.95. But that can be waived if a direct deposit of $500 is made each month.
To open an account, customers need to go to a Wal-Mart store and pay $2.95 for a starter kit. They must also own a smartphone, since most of the banking is done through the app. The kit comes with a MasterCard debit card that can be used to make purchases or to take out money, for no fee, at more than 42,000 ATMs around the country. Using an ATM outside the network will result in a $2.50 charge. There’s also a 3 percent fee for money taken out at an ATM outside of the country.
And to attract people with poor credit scores and little money, Wal-Mart said that credit bureau ratings and other scores typically used to determine eligibility are not part of the process.
Daniel Eckert, senior vice president of services for Walmart U.S., said that the retailer’s customers “feel they just aren’t getting value from traditional banking because of high fees.”
Wal-Mart’s move follows similar ones by big banks. Bank of America launched its SafeBalance account, which has a monthly fee of $4.95 and no overdraft fees.
And Citibank’s Access Account, launched Tuesday, has a monthly fee of $10 that can be waived if customers make one monthly bill payment or one direct deposit or if they average a monthly balance of $1,500 or more.
