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New Walmart Service to Have Minimum Impact on Ecommerce

Walmart will launch a money-transfer service on Thursday, and while it doesn’t offer features that pose a direct threat to the online payment-processing features of PayPal and Amazon Payments, it could cause them concern about where the retail giant might be headed in the payments space – even a small move from Walmart can leave competitors quaking.

Walmart partnered with RIA to create Walmart-2-Walmart Money Transfer Service, allowing customers to transfer money to and from more than 4,000 of its stores nationwide. Walmart-2-Walmart, which competes with Moneygram and Western Union, offers two price points: customers can transfer up to $50 for $4.50 and up to $900 for $9.50. “We’ve removed the complex and costly fees that come with each transaction,” Walmart said on its blog. “And because 95 percent of Americans have a Walmart store within 15 miles of their home, convenience is another benefit this service provides.”

Walmart currently offers prepaid cards, check cashing services, and tax preparation services, though it was foiled in its attempt to get an industrial bank charter about a decade ago, according to the Christian Science Monitor.

Often online merchants welcome additional payment methods, believing more choice leads to higher conversions. But with Walmart’s new service, merchants would have to make the trek to their local Walmart to pick up payments, and even small marketplace sellers are unlikely to welcome the hassle.

Indeed, Walmart is clear the service is not about retail transactions. In its announcement, Walmart said almost 28 percent of Americans were classified as either underbanked or unbanked, with millions using money transfers as a critical part of maintaining household budgets or helping friends and family in times of crisis.

However, there is one area of ecommerce that might benefit from Walmart’s money transfer service: online classifieds sites. While the majority of those transactions are local – where buyers and sellers can exchange cash in person – there are plenty of regional and national purchases on Craigslist and other classifieds. For casual sellers who don’t have credit card merchant accounts and who don’t accept PayPal, a more affordable money-transfer service could speed up payments – and they would not have to worry about checks bouncing from distant buyers – they’d have cash in hand, picked up at a local Walmart.

But the service could also attract would-be fraudsters. Most experts advice buyers not wire transfer money for online transactions.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.