Boston, MA 04/21/2014 (wallstreetpr) – Wal-Mart Stores, Inc. (NYSE:WMT) seems to be getting into the money transfer business. The world’s largest retailer is introducing this new service and has said that it will cost about 50% lesser when compared to other such service providers. This Walmart-2-Walmart form of service is being launched with the help of Ria Money Transfer, which is a subsidiary of Euronet Worldwide Inc.
The launch had immediate effects on rivals in the field as Western Union and MoneyGram, both saw their shares take the slide.
The new service
This new service will be available to customers from April 24, and will allow them to transfer up to $900, to and from about 4000 Wal-Mart Stores, Inc. (NYSE:WMT)’s stores in the U.S. The present rates for this service will be $4.50 for a $50 transfer and $9.50 for a transfer of $900.
Compare this to prices offered by other services, and you realize its big value for the customer. For transferring less than $1,000 elsewhere, it can set someone back by about $70. In fact, Western Union mentions it on their site that the charges for transferring $900 in New York, is $20 for a bank account transfer and $85 for using a credit/debit card.
It is believed that this foray into the money transfer industry will have great impacts and is likely to start off a pricing battle among the players.
This recent announcement made by Wal-Mart makes it act as a bank. About 10 years ago, the retailer had unsuccessfully applied for an industrial bank charter. These efforts were blocked, despite making an assurance that the sole reason was to have its own bank process card transactions. Since then Wal-Mart Stores, Inc. (NYSE:WMT) has gone on to offer various types of financial offerings to its customers.
Reactions from MoneyGram & Western Union
MoneyGram said in an e-mail statement that it was not planning to take pricing actions against Wal-Mart Stores, Inc. (NYSE:WMT). It mentioned that Wal-Mart was its single largest corporate customer. On the other hand, Western Union said that its present services were very well positioned in the domestic money transfer space.
However, both these companies saw a decline in their share prices with the announcement of the news.
