Walmart makes financial services push
16 June 2010 | 8014 views | 0
Retail giant Walmart is ramping up its assault on the financial services sector, acquiring a minor stake in US pre-paid outfit Green Dot and launching its first credit card in Canada on the back of a recently awarded banking license in the country.
Green Dot has issued more than two million shares to Walmart in the wake of a recent extension to their alliance. The shares represent less than one per cent of Green Dot's total after a planned IPO set to raise up to $150 million.
The deal comes as Green Dot awaits regulatory approval for the $15.7 million acquisition of Utah-based Bonneville Bank. Walmart abandoned plans to acquire a US banking license in 2007 in the face of bitter opposition within the industry and among politicians.
The retailer has had more success gaining a license in Canada, receiving approval in recent weeks to launch Walmart Canada Bank. It has now launched a Walmart Rewards MasterCard, which gives cardholders dollars instead of points, in what is widely expected to be just the first stage of an assault on the Canadian market.
Walmart is not the only retailer seeking to take advantage of public disillusionment with banks by offering its own financial services. In the UK Tesco has moved to take on traditional players, buying out RBS to take complete control of their joint venture and turn it into a full service bank.