Quick: What does one of the largest retailers in America do when the Federal Government declines their application for a banking charter?  Do it anyway - ala carte.

Four years ago, Walmart abandoned its long-sought plans to obtain a federal bank charter amid opposition from the banking industry and lawmakers. Ever since, Walmart has been quietly building up a la carte financial services, becoming a force among the unbanked and “unhappily banked,” as one Walmart executive put it.

And, with the current pessimism that some people in America have with banks, Walmart is prospering very well.

“We have a tremendous opportunity ahead of us, and it’s largely due to what you’re seeing around us happen in the industry,” said Daniel Eckert, head of Walmart Financial Services. “We’re not a bank, but we can serve a lot of types of functions you would see someone go into a bank for.”

Walmart says it has no intention of reviving its plans to become a full-blown bank that could make loans and accept federally insured deposits. But the retailer has obtained bank charters in Mexico and Canada, leading some bankers to suggest the company is laying similar groundwork in this country.

For the Arkansas-based company, banking is a natural progression of their business model.  Not only can they save on internal banking fees and processes, but they can also drive more consumers to their stores.

Jennifer Tescher, chief executive at the Center for Financial Services Innovation, which focuses on finding financial services for those who are not well served by banks, said Walmart brought much-needed competition — and lower fees all around — to financial services.

For Walmart, which has been struggling with sales and foot traffic, turning stores into quasi-banks has one indisputable advantage: more shoppers with money in their pockets.

“I cashed my check,” said Barbara Reif, “and now I’m going to go shopping.”



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