The traditional banking industry is getting some pretty serious competition.
This week, Wal-Mart announced a partnership with American Express to offer Bluebird, a new prepaid card designed for consumers who are looking for alternative money management solutions. My colleagues and I have written about many of the fine-print problems of prepaid cards, but this tool looks like a win for consumers.
The card has no monthly fee, no annual fee, no activation fee and a range of other services that won't cost cardholders a dime. Essentially, the only traditional service you'll be charged for while using Bluebird is out-of-network ATM fees.
The lack of fees doesn't mean a lack of technology. Bluebird cardholders can use an app for mobile deposit and person-to-person payments.
This isn't the first time that Walmart has posed a threat to the banking industry. From helping consumers use cash for online purchases to winning financial innovation awards, America's most famous chain is giving big banks a run for their depositors' money.
To illustrate how the country's biggest big-box store is changing the banking landscape, let's compare how its newest financial offering compares with a similar offering from the country's biggest bank -- the Chase Liquid prepaid card.
While cardholders at JPMorgan Chase & Co. can access more than 5,500 branches, Bluebird cardholders aren't far behind. Walmart has 3,925 locations where consumers can load money on to their cards. They also can arrange direct deposit, transfer money from a checking account or savings account and utilize a number of other methods for loading money on to cards.
Winner: Chase (but not by much).
Chase offers its customers access to a network of more than 17,500 ATMs. Bluebird cardholders will enjoy access to the MoneyPass ATM network, which totals more than 22,000.
For Liquid cardholders, Chase has a standard $4.95 monthly fee. Bluebird cardholders pay no monthly fee.
To me, Wal-Mart looks like they're covering all the bases. It offers a big network for in-person transactions, forward-thinking mobile technology and a fee-friendly structure that will compete with all banks, not just Chase.
What do you think of this new prepaid card? Would you consider replacing your checking account with this piece of plastic?