One on One with Jane Thompson, President, Wal-Mart Financial Services
Wednesday, June 20, 2007
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SUSIE GHARIB: Wal-Mart is ramping up its financial services business and announced today it's rolling out a pre-paid Visa card. The retail giant will also expand its money centers to a thousand stores by the end of next year, aiming at customers who don't use banks. The moves come three months after Wal-Mart withdrew plans for a bank charter. Camden Fine of the Independent Community Bankers Association, says the company is still trying to get into full-scale banking.
CAMDEN FINE, CEO, INDEPENDENT COMMUNITY BANKERS OF AMERICA: They've tried four times to get a banking charter. They'll try again. They withdrew this time. Now they are trying to set the stage by making these big announcements on products that are already out there. But it keeps them in the game. It keeps them in front of the public with respect to getting into the financial services industry.
GHARIB: Joining us now to talk more about Wal-Mart's expanding financial plans, Jane Thompson. She's president of financial services with Wal-Mart. Ms. Thompson, thank you for coming on our program.
JANE THOMPSON, PRESIDENT, WAL-MART FINANCIAL SERVICES: Thanks, Susie.
GHARIB: Tell us first why you decided to join with us visa to offer this card to Wal-Mart shoppers?
THOMPSON: When we looked at the consumers that are in our store, our customers, they are, many of them are without a bank account, without any card like a Visa, so we know that there are over 70 million customers in America today, many of them in our store, who are outside the financial services system. So it's a big opportunity to help them get access, the convenience of this card and also a great value you'd expect from Wal-Mart
GHARIB: Now this card, because it is a Visa debit card can be used wherever Visa is accepted. Do you think that most of your customers are going to be using it to shop at Wal-Mart or for other purposes?
THOMPSON: We've been piloting this since the fall and more usage is outside of Wal-Mart than in and just to show you that they know how to use this card, they're using it to pay their utility bills. They're paying their phone bills. They are going to restaurants. They're using it for cable. And they're using it at ATMs and Wal-Mart too but much less Wal- Mart than a lot of the other things added up.
GHARIB: So will this be a contributor to profits at Wal-Mart ultimately down the road?
THOMPSON: We make money on this card. So does GE, our partner Green Dot, and Visa. It's in the other income line of Wal-Mart's P&L.
GHARIB: All right. I understand that Wal-Mart is testing other financial services, so what's the next big thing?
THOMPSON: Well, we're proud of our money centers that we opened. We're going to open 1,000. We're having a grand opening of the new prototype tomorrow in Atlanta. We have other things that we're talking about already. I mentioned today to people, savings, we're looking to see how we can add some savings capabilities to our money card and then more after that. We don't have anything else ready to announce, but there will be more.
GHARIB: But you're going to have these money centers and they have trained personnel. Do you think down the road that maybe Wal-Mart is going to help its customer plan for their retirement or overall financial planning? Do ever see getting into that area?
THOMPSON: Probably not full-fledged financial planning. These are customers that right now are living paycheck to paycheck. Having a card does change their life. They need to save. Some day they obviously would like to have a home, but we really are working on the front end of that to just help our customers get started.
GHARIB: I know that Wal-Mart had made an effort to have a chartered bank and then that didn't work out. But do you see somewhere in your future that there will be a Wal-Mart bank?
THOMPSON: It's not on our list of things to do. It's -- we can do this with partners. We're doing this with the GE money bank so we don't see it as through the lens of a bank. We see it through the eyes of our customers and we can do all this without a bank.
GHARIB: I know that before you came from Wal-Mart, you were at Sears and you were heading up their financial services. Financial services and retailing at Sears didn't quite work out. Why's it going to work at Wal- Mart?
THOMPSON: I was there after a lot of that. I actually just ran the Sears credit card. So what we're doing too is very targeted (ph) these customers. I should say that it already is working. We're doing two to 2 1/2 million transactions every week on these basic services at a great value.
GHARIB: All right, thank you for coming on our program, great information.
THOMPSON: Thanks Susie.
GHARIB: We've been speaking with Jane Thompson, president of financial services with Wal-Mart.
