Bill Payment Likely to Be a Key Function of Wal-Mart MoneyCard

Electronic bill payment is a key function Visa USA is expecting holders of the new Wal-Mart MoneyCard prepaid plastic will use the product for. According to Visa, nearly 20% of purchase transactions on its existing reloadable prepaid products are bill payments. The MoneyCard, which is issued by GE Money Bank and cobranded with Visa, is intended largely for the underbanked, a significant component of Wal-Mart Stores Inc.'s customer base. That demographic category, says Todd Brockman, senior vice president of prepaid at Visa, matches up well with electronic bill-payment capability. “This is a demographic that's timing their payments, waiting til the last minute,” he says. “With a Visa card they can call the vendor and pay that bill. You don't get your cable and phone turned off and you don't get a late fee.” Brockman says focus-group research revealed a strong preference among the underbanked for a financial product that would let cardholders make last-minute payments. He adds the bill payments the network has seen so far on existing prepaid cards are a mix of phone and online transactions. Visa's reloadable prepaid cards fall into three categories: payroll cards, government-disbursement cards, and general-purpose cards, the category the MoneyCard fits into. Though Wal-Mart officially announced the product last week as part of a broader financial-services strategy, it has been piloting an unknown number of cards since November under the name Wal-Mart Prepaid Visa Card. It plans to be issuing the MoneyCard at 1,300 of its stores by the end of the month, with a further 1,300 coming online by the end of July. The chain says it will be issued from nearly all of its U.S. stores by the end of the year. Referring to the number of stores expected to issue the card over the next two months, a spokesman for GE Money, a unit of General Electric Co., says, “the pilot went very well.” Specific results from the test, however, are not available. With the card, consumers can load cash out of pocket or from a check, such as a paycheck. The MoneyCard can be reloaded at participating Wal-Mart stores as well as at retail locations serviced by Los Angeles, Calif.-based Green Dot Corp., whose network specializes in handling prepaid reloads. For consumers, initial issuance costs $8.94, while each reload at a Wal-Mart store carries a $4.64 fee. Wal-Mart waives the reload charge for loads stemming from check-cashing or from a direct payroll deposit. The card also carries a $4.94 monthly maintenance fee. GE Money will collect ordinary Visa consumer debit card interchange on purchase transactions, Brockman says. Besides bill payments, the card can be used at ATMs, for online transactions, and at all points of sale that accept Visa.