Editor's Note: This article were first published by InsideMicrofinance.com in November 2012. Reprinted with permission. All rights reserved; © 2012 by Patti Murphy.
I didn't see it coming. But then, I may have my head stuck on old stereotypes. I've always thought of American Express as a card for the well-healed, and I've often characterized Wal-Mart Stores Inc. as banker to the working poor.
So the notion of American Express Co. and Wal-Mart teaming on an alternative to traditional bank accounts was beyond my scope of understanding.
But that they did. Last month they took the wraps off Bluebird, a prepaid debit card available at rock-bottom prices and replete with bells and whistles (including the ability to deposit checks using smart phones).
Dan Schulman, Group President for Enterprise Growth at AmEx, described Bluebird as a card for consumers who have been disenfranchised by traditional financial institutions. This is what he said next: "In an era where it is increasingly 'expensive to be poor,' we have worked with Wal-Mart to create a financial services product that rights many of the wrongs that plague the market today."
This sounds a little disingenuous. After all, AmEx is a bank, or more specifically a bank holding company. (That's how the company qualified for a government bailout in 2008.) And Wal-Mart has been trying for years to own a bank, only to be thwarted by lawmakers. Now, together, they want to be banker to America's working poor.
What the card has going for it is virtually no fees: $2.00 for loading cash from a debit card and $2.00 for withdrawing cash from ATMs not in Wal-Mart's MoneyCard network. But I'm betting Bluebird won't stay cheap forever.
After all, back in the mid-1980s, when public consternation abounded over the loss of American jobs to low-wage countries, Wal-Mart made a big deal about selling only goods made in America.
Today the retailing giant's dependence on foreign-sourced products is legend. It was a matter of economics, so the company said, and I'm not convinced that the economics of prepaid debit cards can support the current pricing structure on Bluebird, over time. For now it seems Wal-Mart and AmEx will seek to profit from interchange - the discount merchants take for accepting card payments.
One potential problem: many merchants don't accept AmEx cards because they cost much more to accept than do MasterCard Worldwide and Visa Inc. cards. I also question whether the unbanked are so status conscious that they'll take an AmEx-branded reloadable prepaid card product over a Visa- or MasterCard-branded product. Time will tell. 
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