Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Making Banking Fun: Gamification in Financial Services

August 5, 2013
/   Insights

Recently, the Banking.com team sat in on American Banker’s webinar, “Gamification in Financial Services: Five Proven Ways to Get an Edge,” which shared how leading brands in financial services have applied gamification to reach...

Technology M&As: The Beats Go On

May 29, 2014
/   Insights

The ongoing fascination with Apple’s $3 billion purchase of Beats Electronics is entirely understandable, because it’s a cool story. However, it also says a lot about what’s going on between finance and tech.

What We’re Reading

May 5, 2011
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below. Virtual Banking Worlds Provide Tangible Lessons American...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

What We’re Reading: Thanksgiving Edition

November 22, 2012
/   Spotlight

Below are interesting stories the Banking.com staff has been reading over the past week. What have you been reading? Let us know in the comments section below or Tweet @bankingdotcom. Mobile Thursday? Plans for Thanksgiving...

Let’s just say it: Wal-Mart is in the banking business. And soon, it won’t be the only company of its kind to get in on the business.

The massive retailer just launched Walmart Pay, becoming the first in its industry to to offer its own payment capabilities. As expected, the free service will be integrated into the company’s own mobile app, and is set to become widely available nationwide by next summer.

The service works with any Apple or Android device, at any checkout lane, and with any major credit, debit, pre-paid or Walmart gift card. Clearly designed specifically for its own customer base, Walmart Pay enables users to check in in to pick up an online order at a Wal-Mart store, refilling pharmacy prescriptions and finding an item’s store location. The fact that 22 million consumers already use the Wal-Mart app every month means it has a potential head start in this key market.

As we all know, that market is already crowded. Google Wallet has been around for more than four years, and the company’s Android Pay just a few months ago. Samsung Pay has a variation on that platform too, with the support of the global electronics conglomerate. Tech innovator Apple hit the market more than a year ago with Apple Pay, bringing along retailers as diverse as Macy’s, Duane Reade and Whole Foods as partners. And there are many alternatives, such as Venmo, Square and Belly.

Still, Wal-Mart’s entry into mobile payments is interesting for reasons that go beyond convenience and brand extension.

First, this is by no means the company’s first such offering: Wal-Mart has made multiple forays into financial services (with varying degrees of success). In September of last year, the retail giant company unveiled GoBank, a service that teamed up with Green Dot (best known for its prepaid payment cards) to offer checking accounts to just about everyone.

As with most Wal-Mart initiatives, it was designed to offer commodity series for a low cost: no minimum, and not even a penalty for overdrafts or bounced checks. While the retailer has a massive customer base that’s more diverse than the stereotype holds—after all, in many areas it’s the only game in town—GoBank was ideal for consumers with a troubled credit history. For the record, this is a massive market. The FDIC estimates that some 10 million households have no contact with a banking institution of any kind.

Additionally, Wal-Mart has the clout and resources to move to its own beat in many disciplines. Remember, the company chose to stay away from the Apple Pay launch, going instead with the Merchant Customer Exchange, a vendor-owned consortium.

But there’s also a larger question that deserves attention. On this blog, we’ve commented often on how financial services providers have had critical functions hijacked by more nimble technology vendors. Indeed, the mobile payments field alone has many examples of this breed of competition. So sure, Wal-Mart clearly stands out for its size and global reach, but if it can offer one service after another that were previously the exclusive domain of banks, could other big companies follow suit?

If that happens—and if history is any guide, it surely will—one area to monitor will be that of regulation. Every industry has compliance issues to deal with: Think health care, in which a welter of mandates makes it very hard to get new drugs to market. Financial service is absolutely no exception: Banks of every stripe operate under onerous rules that stand as obstacles to fast changes.

By itself, Wal-Mart Pay is just one more mobile payment option from one more vendor, even if it happens to be the world’s largest retailer. But as Wal-Mart and other players from outside the industry serve up their own mobile payment series and checking accounts, will the government step in with new levels of scrutiny? Stay tuned.

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.