The two companies said Monday that Bluebird, which began during a pilot program late last year, will have no minimum balance and no monthly, annual or overdraft fees. They say that the only fees that will be associated with the card will be transparent and within the user's control, such as out of network ATM withdrawals by consumers who don't use direct deposit.
Wal-Mart Stores Inc. and American Express Co. say the card is an alternative to debit and checking accounts and will include such features as the ability to deposit a check to one's Bluebird account by simply taking a picture with a smart phone. It will also offer the same fraud protections in an event the card is stolen or lost as other standard cards.
The companies say Bluebird was built on feedback from consumers who said they were bothered by rising fees related to checking accounts and debit services.
"We are recreating and reimagining what checking and banking services might look like in the 21st century," said Dan Schulman, group president, Enterprise Growth at American Express in an interview with The Associated Press. He said the partnership with Wal-Mart aims to set up a "moral equivalent of a bank branch at retail."
The move comes as American Express is looking for new ways to expand its customer base beyond its traditional wealthy clientele. For Wal-Mart, the Bluebird service is the latest financial product offering to be pushed by the world's largest retailer, but it's also the most comprehensive.
Prepaid cards are a fast-growing segment of the payments industry. While the cards are aimed mainly at people who don't have bank accounts or whose credit ratings are damaged, they also are becoming popular with consumers seeking to avoid surprise bank fees and keep from accumulating credit card balances.
But prepaid cards are typically not linked to a checking account. Monday's announcement shows how the financial service landscape is changing in light of the rising popularity of smart phones and other technological advances, and evolving needs of consumers, who want on-the-go financial services.
"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," Daniel Eckert, vice president of financial services for Walmart U.S., said in a statement.
Wal-Mart is not new to the prepaid card segment, as it already offers prepaid cards from Green Dot Corp. During a call with reporters, Eckert said that Walmart has no plans to end its relationship with Green Dot in light of its new partnership with American Express. The discounter has a contract with Green Dot that expires in 2015. He says Wal-Mart is just broadening its assortment of financial services to serve more customers.
The Bluebird cards can be used at a variety of locations that accept American Express. Users can deposit funds onto the card via direct deposit, with cash at any Walmart register, or by linking a checking, savings or debit card to the account. Another key feature: the user can set up sub-accounts for family members or others giving them access to certain funds, instead of the entire account. So parents could set up such accounts using Bluebird for their children in college.
Wal-Mart and American Express said that more features will be added to Bluebird in the first quarter of 2013. These features will include more options to deposit money and check-writing capabilities.
Bluebird will be available next week at www.bluebird.com and in more than 4,000 Walmart stores.
Wal-Mart, based in Bentonville, Ark., is the world's biggest retailer. Its stock added a penny to $75.14 in midday trading Monday. Shares of American Express, which is based in New York, gained 4 cents to $58.60.