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Walmart's effort to get customers to build up their savings accounts

theatlantic.com

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Re: Walmart's effort to get customers to build up their savings accounts

#21

Post by ajdlinux »

_m8fo wrote: post #20
jmts wrote: post #14

Earlier quoted context omitted.

A paltry sum of money is the first step to a reasonable sum of money. An interest in saving a paltry sum of money is arguably a useful skill for people earning paltry sums of money, as I'd hazard a guess that it should encourage them to spend less on useless garbage they don't really need. Gamifying this to the benefit of both parties is capitalism at work. Any comparison to slavery is beyond ridiculous.

> Loretta Taylor, who lives in the southern-Illinois town of Mount Vernon, started using a Walmart MoneyCard when her local bank branch closed late last year, forcing her to drive 45 minutes to make a deposit. A registered nurse, she has lately been working as an in-home caregiver, and sometimes gets paid in cash, which she can put onto the card (for a $3 fee) at a nearby Walmart. “I’m not making much money right now…

The way I read it, it takes 45 minutes to drive to her old bank branch, whereas the nearby Walmart is much closer.

Re: Walmart's effort to get customers to build up their savings accounts

#22

Post by [deleted] »

ajdlinux wrote: post #21
_m8fo wrote: post #20

Earlier quoted context omitted.

> Loretta Taylor, who lives in the southern-Illinois town of Mount Vernon, started using a Walmart MoneyCard when her local bank branch closed late last year, forcing her to drive 45 minutes to make a deposit. A registered nurse, she has lately been working as an in-home caregiver, and sometimes gets paid in cash, which she can put onto the card (for a $3 fee) at a nearby Walmart. “I’m not making much money right now…

The way I read it, it takes 45 minutes to drive to her old bank branch, whereas the nearby Walmart is much closer.

[deleted]

Re: Walmart's effort to get customers to build up their savings accounts

#23

Post by egwynn »

fefesafaea wrote: post #13

Kind of fucked up that the article doesn't mention the fees associated with these cards until like 3/4 of the way into the article. These cards charge 5 bucks a month, plus like 3 dollars to deposit cash, 3 dollars to withdraw cash, in addition to the 5-10 dollars up front for the card itself. Because of this, a person using this type of card can easily spend $100+ a year on fees. Not exactly a great way to save mone…

The article sort of addresses the consumer motivation for choosing prepaid cards over traditional banks:

    During Servon’s research working as a teller at a check
    casher and payday lender, consumers told her that the fee
    structures of nonbank alternatives were more transparent 
    and predictable than those at conventional banks—crucial to 
    anyone living on a budget.


    Prepaid cards offer this predictability, and over time 
    their reputation for transparency has improved.

Re: Walmart's effort to get customers to build up their savings accounts

#24

Post by bpodgursky »

fefesafaea wrote: post #13

Kind of fucked up that the article doesn't mention the fees associated with these cards until like 3/4 of the way into the article. These cards charge 5 bucks a month, plus like 3 dollars to deposit cash, 3 dollars to withdraw cash, in addition to the 5-10 dollars up front for the card itself. Because of this, a person using this type of card can easily spend $100+ a year on fees. Not exactly a great way to save mone…

Just read the article. It's $1 for the card and free cash withdrawal at a Wal-Mart banking center.

It is $5/mo for accounts with less than $1000, but you're not going to get better than that at a bank.

More importantly, they aren't pulling the overdraft scams that banks are. The example right here is that the customer in question pulled $100 in overdraft fees over a $4 purchase, with a traditional bank card.

Re: Walmart's effort to get customers to build up their savings accounts

#25

Post by protomyth »

fefesafaea wrote: post #13

Kind of fucked up that the article doesn't mention the fees associated with these cards until like 3/4 of the way into the article. These cards charge 5 bucks a month, plus like 3 dollars to deposit cash, 3 dollars to withdraw cash, in addition to the 5-10 dollars up front for the card itself. Because of this, a person using this type of card can easily spend $100+ a year on fees. Not exactly a great way to save mone…

Is there data on the number of CU's that don't charge fees because I haven't found one that doesn't charge overdraft and have seen a monthly low aggregate balance fee?

Re: Walmart's effort to get customers to build up their savings accounts

#26

Post by greeneggs »

_m8fo wrote: post #20
jmts wrote: post #14

Earlier quoted context omitted.

A paltry sum of money is the first step to a reasonable sum of money. An interest in saving a paltry sum of money is arguably a useful skill for people earning paltry sums of money, as I'd hazard a guess that it should encourage them to spend less on useless garbage they don't really need. Gamifying this to the benefit of both parties is capitalism at work. Any comparison to slavery is beyond ridiculous.

> Loretta Taylor, who lives in the southern-Illinois town of Mount Vernon, started using a Walmart MoneyCard when her local bank branch closed late last year, forcing her to drive 45 minutes to make a deposit. A registered nurse, she has lately been working as an in-home caregiver, and sometimes gets paid in cash, which she can put onto the card (for a $3 fee) at a nearby Walmart. “I’m not making much money right now…

You are misreading the quote. Had she stayed with the same bank, she would have had to drive 45 minutes to get to a branch. There is a Walmart in Mount Vernon, so getting there is more like a 10-minute drive.

Re: Walmart's effort to get customers to build up their savings accounts

#28

Post by protomyth »

oconnore wrote: post #6
henryfjordan wrote: post #3

Earlier quoted context omitted.

So? The people targeted for this card are those who otherwise aren't saving anything. The same people would be subject to larger fees at a bank and get sub-1% rates on a savings account. They benefit from this program. Why should Walmart not see that hole in the market and exploit it? Isn't that what this community is all about?

Capital One 360 pays 0.20/0.75 APY (checking/savings respectively) with no fees or minimums (I'm sure others do too, I just happen to be a customer ^). So... they are not benefiting. They are losing out on interest and a real bank account, and Walmart is seducing them to stay with a lottery.

Capital One 360 is for people with better credit than the folks in the article have. If you have means then you get better investments. Heck, a lot of the people in the article are rejected just trying to open a bank account.

AmEx allow direct deposit to their Bluebird card which is another Walmart card.

Re: Walmart's effort to get customers to build up their savings accounts

#29

Post by spking »

Some may not realize this, but there is a YC backstory here.

Sam Altman's startup (Loopt) was acquired by Green Dot (the company behind the WMT Money Card) back in 2012.

Many of the GoBank features mentioned in the article (Stash/Vault, Fortune Teller) came directly from Steve Streit (Green Dot CEO), acqui-hired Loopt employees, backed up by IDEO research that was commissioned by Steve several months before the acquisition.

I was working there at the time Loopt was folded in, and was lucky enough to more or less report to Steve. I can tell you he really is deeply passionate about the underbanked community. I saw him fly into a fit of rage when a major outage prevented customers from accessing their funds for a brief time ("Don't f*ck with my customers' money!").

Say what you will about the fees, but these prepaid cards are a very convenient lifeline to many people who would otherwise be shut out of the system.

Re: Walmart's effort to get customers to build up their savings accounts

#30

Post by protomyth »

flukus wrote: post #19
twblalock wrote: post #11

Earlier quoted context omitted.

The article mentions that many people are unbanked because they fear overdraft fees, or have had to pay them before. This is a well known problem, and it drives people to use check cashing stores and debit cards like the one WalMart offers instead of banks.

They can't get debit cards from a bank? Even my mastercard is tied to a debit account. Edit - from the comments below it sounds like the issue is caused by a fucked up banking system more than anything.

They cannot get a bank account to get a debit card. Banks and a lot of credit unions have become problematic for low income folks.
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