House Editorial: Wal-Mart's creative new way to get their hands on your money
Posted on April 20, 2006

Wal-Mart.

They sell everything and have worked throughout their existence to make it the official store of everyone. From produce to underwear, from CDs to tires, one of the multiple Wal-Marts in your area is the place to be if  you don’t want to go anywhere else.

The superstore has an optometrist, a salon, a photo center, a garden center, a gas station, McDonald’s and now perhaps, in the near future, a bank.

Last July, the biggest corporation on earth went to the Federal Deposit Insurance Corporation in hopes of starting Wal-Mart Bank. The application has drawn over 3,600 letters of protest, forcing the FDIC to hold a public hearing for the first time ever. The logic behind Wal-Mart’s bank bid is to make it cheaper for the company to process debit and credit card purchases. Right now, every time someone uses plastic for payment, Wal-Mart pays whichever bank sanctions that plastic a small fee to watch over the money while it’s being transferred. The ever-thrifty Wal-Mart wants to eliminate this cost by simply creating its own bank. Potentially, this move would save Wal-Mart between $5 and $10 million a year, according to Time. To make this appeal to the public, Wal-Mart says the savings will be passed on to its customers.

Wal-Mart claims its bank won’t affect local banks, as it intends to keep the entity in-house and not set up ATMs across the land. However, considering what has happened to small businesses when Wal-Mart comes to town, this is on the side of quite unlikely.

Wal-Mart has a reputation for mangling the competition and leaving it in ruin. The corporation’s “falling prices” usually land on local business owners. And with the potential formation of Wal-Mart Bank, those prices would put banks into their already congested crosshairs; increasingly, Wal-Mart that more resembles an empire than a company.