Wal-Mart Flies Away with Amex Bluebird

by Patricia Hewitt 0

Not holding a banking license is no longer animpediment to offering financial services products to the consumermarket and with the announcement of the new American ExpressBluebird product at Wal-Mart, traditional debit card issuers shouldtake note. Directed squarely at Wal-Mart’s core consumer, theproduct offers what is essentially a free checking account, whichincludes direct deposit, bill pay, surcharge-free ATM access,household accounts, person-to-person payments, remote deposit checkcapture, and mobile banking.

“The financial services landscape is changing.Technological advances, regulatory changes, and evolving consumerneeds are redefining payments ranging from prepaid, to checking anddebit. Bluebird is our solution to help consumers who currently maybe poorly served by traditional banking products. It allows them toeasily and safely move, manage, and spend their money. In an erawhere it is increasingly “expensive to be poor,” we have workedwith Walmart to create a financial services product that rightsmany of the wrongs that plague the market today,” said DanSchulman, group president, Enterprise Growth, AmericanExpress.
The product is built on the Amex Serve platform. Amex willdiscontinue Serve products on Dec. 8, according to Bluebird’swebsite. Cardholders will have the option of transferring theiraccounts to the new products.

Wal-Mart has offered its MoneyCard to the market for years and hasbeen instrumental in helping to drive down the cost of theseaccounts in the United States. This new product will likely servethe same purpose. The difference between the Bluebird product andthe original MoneyCard is feature functionality. Bluebird puts theaccount on par with any other digital checking account and alsovaults Amex into a market it summarily avoided in with its globalcharge card products.

With its digital features, we would expect Bluebird to be animportant component in the Merchant Customer Exchange currentlyunder development. Target also has been quietly testing an Amexprepaid card product for the past couple of years. With thesealliances and network strategies, the retailers have theopportunity to shift transactions off the global networks at boththe product and network level. Discover also is working at buildingout their financial services strategy, most notably with theirrecent announcement of its PayPal alliance.

The impact of these new products is not yet apparent in theindustry and these organizations have the hard work ahead in termsof building a consumer base and leveraging the assets they’vecreated to build market value. For traditional debit card issuers,however, that depend on everyday spend to fund their retailchecking account franchises, that impact might be felt sooner thanlater.