Designed for what’s being referred to as “low income consumers” two of the nation’s biggest companies, Wal-Mart and American Express, announced on Tuesday that they were partnering to introduce a new prepaid card named Bluebird. It’s designed to be an “alternative to debit cards and checking accounts”, said the companies at a joint press release. Many are saying it’s going to attract far more than low income consumers.
Bluebird can be used anywhere American Express is accepted (it’s not limited to Wal Mart stores) and consumers may also use their prepaid cards to withdraw cash from ATMs, something that the growing number of unbanked and underbanked consumers often don’t have access to. Even better is there are no monthly usage fees, annual fees or overdraft fees (it’s a prepaid card, meaning a consumer can’t spend more than what’s available in his account).
There are no minimum balance requirements, either. There are, however, some ATM fees that could apply. Customers can also use their Bluebird to pay their bills, shop online and use their smartphones in ways they might have never before been able to do. But is it worth it? Is there really a need for another prepaid financial product in this particular sector? One thing’s for sure – the introduction of this co-branded offer is timed perfectly with the holidays quickly approaching.
At first glance, this prepaid card isn’t much different than other similar products. Users can deposit funds onto the Bluebird card in a number of ways. They can have their paychecks direct deposited, they may add cash at Wal Mart stores – along with many other retailers – and they can transfer money using a smartphone app. The app is a nice touch, and not all prepaid cards offer this convenience to their customers.
Bluebird will also have the features of a digital wallet, but what’s most impressive is it will also include some of American Express’s most popular features, including roadside assistance. It’s a brilliant mix of the best of two of the country’s most popular brands. It’s also being touted as a way for the growing number of Americans who don’t have access to a traditional bank accounts the opportunity to do their banking at the same time they’re checking out in Wal Mart. It’s an aggressive plan – and frankly, it’s one whose time has come.
So what are the other solid reasons to choose this card? The most obvious bonus of the joint effort directly benefits consumers by
presenting a lower-fee option to a particular sector that’s seen rising fees associated with debit and checking services,
said an American Express spokesperson. Remember, the prepaid market isn’t as heavily regulated as the traditional credit sector. This is an especially attractive bonus for those consumers who are trying to come back from a tough recession and difficulties in obtaining bank accounts. Fees are definitely on the rise, some ATMs climbing as much as 4% over the past two years – the Bluebird keeps those rising fees in check.
Here’s the true benefit of the Bluebird – Both Wal Mart and American Express have said – in the joint pressers and on their own websites that the program will cost users fees that are only “clear, transparent and within their control,” such as out-of-network ATM fees.
Our customers tell us that they’re tired of navigating a complex maze of do’s and don’ts to avoid the ever-growing list of fees found on checking products,
said Vice President of Financial Services for Wal Mart Daniel Eckert. He went on to say the co branded offer eliminates the problem and that they’re confident their new product is the “best on the market” and is designed to help consumers regain control of their finances while helping them affordably take care of their daily needs.
While Bluebird was initially offered to a select few markets earlier this summer, it’s now being marketed nationally, both in Wal Mart stores and on the American Express and Wal Mart websites. Consumers can also sign up at the bluebird.com site.
This isn’t the first prepaid offer from Wal Mart. A few years ago, the Green Dot card made its debut and has gained a high market share and more importantly, high marks from the consumers using the cards. Officials from both the retailer and American Express are quick to point out that Bluebird is different and offers an alternative “total package” option.
The media, meanwhile, has its owns thoughts:
- A Forbes Magazine column wonders if the Bluebird might finally put a halt to the celebrity debit cards.
- CBS News calls the new Bluebird “a credible threat to traditional banking” and that it’s designed for the “less affluent”
- LA Times is calling it a “financial product for low income families”.
What are your thoughts on the Bluebird? Do you think it’s found the right market?
- FTC Warns of Prepaid Card Scams – May 23, 2013