Shares of MoneyGram, Western Union take a hit.
By Deepak Chitnis
WASHINGTON, DC: Retail giant Walmart is opening up its own in-store money transfer service, a bold step that will provide stiff competition for established remit services like Western Union and MoneyGram.
In a press release issued early Thursday, Walmart declared that it would be offering easy remittance services between all of its 4,000 service locations across the US, starting on April 24. What’s more, transaction fees will be 50% less than what they normally are at competing money transfer services, making Walmart’s offer incredibly attractive.
“Walmart-2-Walmart offers a clear fee structure with just two pricing tiers: customers can transfer up to $50 for $4.50 and up to $900 for $9.50. Competitive offerings often include 10 or more fee tiers and charge up to $70 for transferring less than $1,000,” the retail chain announced. “Money transfers above $50 make up the majority of transactions in the U.S. Walmart-2-Walmart will bring dramatic savings to these customers.”
For comparison, Walmart posted competitors’ fees for the very same transaction amounts. According to Walmart, other companies charge as high as $5.00 for amounts of $0-$50, $11-$12 for $50-$200, $34.50-$40 for $400-$500, $46-$58 for $600-$700, and $57-$76 for amounts in the $800-$900 range.
“After listening to our customers complain about the high fees and confusion associated with transferring money, we knew there had to be a solution,” said Daniel Eckert, Senior Vice-President of Services for Walmart U.S. “Walmart-2-Walmart brings new competition and transparent, everyday low prices to a market that has become complicated and costly for our customers. We’re doing what we do best – launching a new service that challenges the status quo and drives down prices for our customers.”
According to the Associated Press, stock prices for both MoneyGram and Western Union plummeted on Thursday as a result of the announcement, falling 15% for the former and 6% for the latter.
The Walmart-2-Walmart service has been created in conjunction with Ria Money Transfer, a subsidiary of Euronet that is one of the “leading global providers of money transfers.” Ria wil be the licensed money transfer operator behind all transactions that take place under the Walmart program, while Walmart will act as an authorized agent of Ria.
“We believe the combination of Walmart’s existing footprint, with Ria’s high-quality service, and our shared focus on the customer is what makes Walmart-2-Walmart a true differentiator and stand apart from other services on the market,” said Juan Bianchi, Chief Executive Officer of Ria.
There is no word yet on whether or not this money transfer service will expand to include Walmart’s international locations, however. Currently, the company operates 20 BestPrice Modern Wholesale locations across eight states in India, with the first one opening in Amritsar back in 2009.