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How Wal-Mart Is Saving America This Week

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My Foolish buddy Rich Smith got his bowtie in a bunch the other day when he accused Wal-Mart Stores (NYSE: WMT  ) of ruining America by giving employees payroll cards instead of paper paychecks. Can I disagree?

The "con" in consumer
Far from the con artist Rich imagined, duping consumers to get them to spend more, Wal-Mart is really a trailblazer, leading the unwary away from financial ruin at the hands of bankers.

Because it's not just payroll cards that Wal-Mart is introducing -- it's an entire suite of financial services that are remaking the discounter into a one-stop, low-cost financial services center. Wal-Mart's offering many of the services of a bank, without the accompanying bailout.

Save, save, save
Many people probably don't realize the full breadth of opportunities available to them at Walmart stores. Walk into any MoneyCenter today, and a Walmart shopper can:

  • Get a money order, or transfer money anywhere in the world, with Moneygram International (NYSE: MGI  ) .
  • Cash payroll and government checks for just $3.
  • Get a prepaid Visa (NYSE: V  ) debit card (actually issued by GE Money Bank, a General Electric (NYSE: GE  ) subsidiary).
  • Print personal and business checks.
  • Invest through ShareBuilder

The newest service is nationwide bill-payment, which the company has rolled out to all 3,700 U.S. Walmart stores.

According to a study commissioned by Wal-Mart, 21 million households pay at least one bill a month in person. Now they can go to their local Walmart and use CheckFreePay by Fiserv (Nasdaq: FISV  ) to pay most of their bills.

Check that
For just $0.88 each, shoppers can pay their car, phone, cable, and electric bills. Need to get that check there overnight? It'll cost you only $1.88, and you can even get same-day bill payment -- within 10 minutes, actually -- through Moneygram, starting at $4.50. Considering the cost of a stamp, envelope, and check -- many banks still charge fees for low-balance checking accounts -- Wal-Mart's dirt cheap services are downright patriotic.

And you don't even need a checking account. To cash a check, for instance, just bring the check, an ID, and your Social Security number to any register, and you can get your cash. The Aite Group estimates that Wal-Mart had an 11% share of the check-cashing market in the fourth quarter of 2008. The Pew Research Center adds that if the unbanked stopped using payday lenders like Advance America (NYSE: AEA  ) and Cash America (NYSE: CSH  ) , they would save $150 million annually.

Foolish takeaway
If you've got a free checking account that offers free bill payment, maybe doing your financial chores while you fill your shopping cart doesn't work for you. But for the 22 million unbanked and underbanked Americans who don't have access to traditional financial services, this represents a one-stop shop of financial independence.

Wal-Mart's not leading us down the road to ruination. It's taking us straight to the path of fiscal redemption.

Still think Wal-Mart's the epitome of evil -- or a champion of capitalist virtue? Let us know in the comments section below.

Wal-Mart is a Motley Fool Inside Value selection. Try any of our Foolish newsletter services today, free for 30 days.

Fool contributor Rich Duprey owns shares of Wal-Mart but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.

Read/Post Comments (6) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 12, 2009, at 9:56 AM, madmilker wrote:

    duh! enough said....

    "Under the Federal Reserve Bank Act, the bankers control our economy. The FED controls interest rates and the amount of money in the economy. These factors determine either economic prosperity or the lack thereof. Bankers are now pushing for a one world government and a cashless society. Why cashless? No cash means no money for drugs, no theft, and the ability to collect taxes on the underground economy. Anyone who wouldn't support a cashless society must be a drug dealer, thief, or tax evader, right? What a cashless society really means is the banks can now control you. Today you fear the IRS. In a cashless society, if you disagree with the bankers' political goals, you'll find your money gone via computer error."

  • Report this Comment On September 12, 2009, at 11:06 AM, duybuywalmart wrote:

    Don't buy Walmart and let it collapse. This company does not support American-made products! They have no social responsibility to create jobs. Join me to say NO to Chinese products and pay pennies more for American-made products to support who do have jobs!

    Americans buy Americans!

  • Report this Comment On September 12, 2009, at 6:08 PM, madmilker wrote:

    Read "The Flow of Trade in a Global Economy" by Lance Winslow. There is one quote from his article tat comes in mind. "Now let us look at Wal-Mart again; you buy a product there, 6% goes to the employees, 10-18% is profit to the company, 25% goes to other costs and 50% goes to re-stock or the cost of goods sold. Of the 50% about 20-25% goes to China, a guess, but you get the point. Now then, how long will it take at 433 Billion dollars at year for China to have all of our money, leaving no money flow for us to circulate? At a 17 Trillion dollar economy less than 40-years minus the 1/6 they buy from us. Some say that if we keep putting money into our economy, it would take forever, but if we do not then eventually all the money flow will go. If China buys our debt then eventually they own us, no need to worry about a war, they are buying America, due in part to our own mismanaged trade, so whose fault is that? Not necessarily China, as they are doing what's in the best interests, and we should make sure that trade is not only free, but fair too."

    Also, think for a moment about George Washington....yes the man tat is on the US dollar bill.... "Washington had been reelected unanimously in 1792. His decision not to seek a third term established a tradition that is now embedded in the 22d Amendment of the Constitution. In his Farewell Address of Sept. 17, 1796, he drew on the results of his varied experience, offering a guide for both present and future. He urged his compatriots to cherish the Union, support the public credit, be alert to the “insidious wiles of foreign influence,” respect the Constitution and the nation’s laws, abide by the results of elections, and eschew political parties of a sectional cast. Asserting that the United States and Europe had different interests, he declared that it “is our true policy to steer clear of permanent alliances with any portion of the foreign world,” trusting to temporary alliances for emergencies. He also warned against indulging in either habitual favoritism or habitual hostility toward particular nations, lest such attitudes should provoke or involve the country in needless wars."

    Take the time to read his farewell address after only eight years of serving his country and than ask yourself tis....How do you think George feels being sent overseas in return for all tat foreign so-call cheap items and being left in a foreign bank because the American worker doesn't make anythig for the foreigners to buy. Cheap items didn't make tis great union of 57...oops! 50 states the greatest place on the face of tis Earth.....the American worker (union and non-union) did. You can't have a strong country without having a strong currency and you can't have a strong currency unless you keep it floating around within your 50 states. Tis is why the store with the star in the name puts 95% China made items in their stores in keep their "yuan" in their country helping the nice people there. And with only 5% left for all the other 182 country's tat make stuff including the United States of America....tat doesn't produce very many jobs outside of China.

    Being an old person myself and knowing how it wus back in the 40's, 50's and 60's in tis union of 50 states....I look at George each time I pull him out of my billfold and make a promise to send him out for items made in America so after floating around helping each hand he touches jus maybe one day he will shake mine again.

  • Report this Comment On September 13, 2009, at 4:20 PM, janbam wrote:


    That was cool - and so true. Thank you for taking the time to teach and remind us of things that need to get straightened out with some simple but effective practices.

    I guess it wouldn't hurt to pray over our money with the intent that it indeed go around the country to build and bless it.

    Stay Mad Milker

  • Report this Comment On September 15, 2009, at 8:15 AM, mcbride91965 wrote:

    walmart please over priced and workers that dont care about customer services because they are under paid, and as people know workers are the back bone of any also carries so many items made in other countries even after the fact of knowing there are harmful chemicls and lead in toys etc.and try to buy jeans that fit your kids or self, since every name brand is made in a different country and uses there version of sizes,ive had to make a few trips back and waste gas to exchange jeans of the wrong size for this reason.and at the register a lot of people and my self are always over charged for items never under charge.huh i gave up on walmart a long time ago.what a joke.

  • Report this Comment On January 04, 2010, at 12:53 PM, JohnD24x7 wrote:

    I know this article is many months old now, but I just read it article and I'm amazed at how narrow sighted, illiterate and utterly false are the comments given so far.

    Here are few FACTS:

    1. 100 million people shop Wal-Mart's American stores every week

    2. Wal-Mart employs roughly 1.2 million Americans

    3. Wal-Mart accounts for 8% of retail sales in America

    The flow of consumer cash is what drives our economy and country 100%. Those Wal-Mart stores employing 1.2 million Americans servicing 100 million shoppers every week keep suppliers,vendors, truck drivers, shippers, etc. in business and in turn all of their collective paychecks drive local economies where the money is spent.

    China is just about the least consideration in this economic picture.

    Bottom Line: Wal-Mart is GREAT for America

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