Apparently, many credit unions and smaller banking & lending institutions are nervous over the fact that Wal-Mart seems aimed to enter the financial services arena. In 2007, Wal-Mart failed to gain a formal banking charter. However, they have still begun to offer a range of banking services at some stores via US MoneyCenters. According to the recently-published Fine Research Report, Wal-Mart will be targeting:
…young, blue collar, early-career shoppers who come for the low prices and choose the plastic card.
Services Wal-Mart may ultimately offer include:
- Auto Loans
- Small Business Loans
- Demand Deposits
The strength of the Wal-Mart brand could make them highly successful in this field, as well as the convenience and cross-selling opportunities they can offer. The most worry seems to be coming from credit unions, who traditionally marketed to the aforementioned demographic. Buyers with very poor credit will still need options such as Buy Here Pay Here financing, which de-emphasizes credit score in favor of ability to pay.