Wal-Mart Stores and American Express have teamed up to provide financial services to customers who often do not have traditional bank accounts by offering a prepaid debit card called Bluebird.
The Bluebird will allow for deposits by smartphone and mobile bill paying, with no minimum balance or monthly, annual, or overdraft fees, the companies said on Monday.
"Bluebird is our solution to help consumers who currently may be poorly served by traditional banking products," said Dan Schulman of American Express. "In an era where it is increasingly 'expensive to be poor,' we have worked with Walmart to create a financial services product that rights many of the wrongs that plague the market today."
Shares of prepaid card companies Green Dot Corp and NetSpend Holdings Inc fell 18 percent and 7 percent, respectively On Monday.
The entry of bigger players with deeper pockets into the lucrative prepaid card market has hurt business of the companies that pioneered these products.
Wal-Mart, the world's largest retailer, has long tried to serve its lower-income shoppers who have little or no access to credit. It offers check-cashing at low rates and other services as it tries to appeal to shoppers without bank accounts.
SW Retail Advisors founder Stacey Widlitz noted that dollar stores - which include Family Dollar and Dollar Tree - have been trying to wrestle market share from Walmart by adding more groceries and payment types.
"But Walmart isn't lying down and taking it quietly," Widlitz said. "The Amex card is another way to appeal to the low-income consumer."
Bluebird will be available next week online and in more than 4,000 Walmart stores in the United States, they said.
American Express has been testing this program since late last year.
Users will be able to put money onto the card through payroll direct deposit, remote check capture with a mobile application, with cash at a Walmart register, or by linking to a bank account.
Cash withdrawals from American Express' ATM machines carry no fees or surcharges for customers enrolled in direct deposit. For those without direct deposit, withdrawals are $2. For out-of-network ATMs, each withdrawal is also $2 and additional operator fees may apply.
Walmart has said in the past that about 85 percent of transactions at its U.S. stores are paid for with cash.
Green Dot shares slid $2.24 to $10.61 on the New York Stock Exchange, while NetSpend was down 75 cents at $10 on the Nasdaq. Wal-Mart's shares gained about 14 cents and American Express shares were largely unchanged.
© 2016 Newsmax. All rights reserved.