Report charts Walmart’s banking strategy

Madison, Wis. A new report maps out the shape of Walmart's retail financial services footprint in the United States and Mexico. The study, The Blended Walmart Business Model, published by the Filene Research Institute and written by Robert Manning, PhD, knits together the many angles of Walmart's involvement in banking services: from its 2007 charter travails to its foray into Mexican banking and, most importantly, to its long-term strategy of providing financial services to ever more of its many customers -- with or without a formal bank charter.

The report makes the case that Walmart still wants a bank charter. The potential from finance and penalty fees combined with interchange fee savings' could easily garner more than $1.3 billion annually from Walmart's payment card system and portfolio of customer credit-card balances, according to the study.

The study suggests Walmart's plan is advancing even without a U.S. bank charter, and notes that while the retailer currently mainly offers ancillary financial products, it may soon operate in the more traditional business model of deposits and loans.

The nonprofit Filene Research Institute is a consumer finance think tank serving the North American credit union system of 100 million members and $950 billion in assets.