Wal-Mart announced it will be offering a reloadable prepaid Visa debit card to serve the group of unbanked residents of America who don’t want to have or cannot have credit checks. Personally I like the product and have been worried about the unbanked population of approximately 10 - 25 million who are often at a disadvantage in our electronic payment economy, not to mention how terribly they have been abused by check cashing operations. So if you happen to be invested in any companies that make their money on this group such as WU, MGI, EZPW, CSH, FCFS, WRLD, etc. you might want to consider the competition from Wal-Mart.

This looks like a great use of Wal-Mart’s real estate and fit with their customer demographic. And it’s a nice compromise to avoid the regulatory hassles it encountered when trying to set up a formal banking operation. But I cannot help but look at this card as a product tailored to illegal aliens who need services like check cashing, money orders, bill payment and money transfers - all the stuff being offered by Wal-Mart’s MoneyCenters. If nothing else, it will certainly make the remittances back to Mexico a little easier.

When Bank of America came out bluntly with its illegal alien credit card program, the major media and bloggers went wild. I don’t see much of a difference with Wal-Mart’s debit card and MoneyCenter products other than they are doing a more subtle job of spinning it. Sorry, but I am just calling it as I see it. It will be interesting to see whether there will be any backlash against Wal-Mart like there was with Bank of America.