Wal-Mart to Enter Prepaid Card Market

       The Financial Times has reported that Wal-Mart will partner with GE Money Bank to launch a prepaid card product aimed at the 80 million U.S. residents without a bank account.  Link to Reuters article.  Prepaid cards are a growing industry, generating a market worth $76 billion last year, according to the Financial Times.  Wal-Mart's "quasi-bank account" cards would have a $3,000 limit and would be covered by federal deposit insurance through GE Money Bank.  This news comes just weeks after Wal-Mart announced its entrance into the financial services market by offering a discount brokerage service.  Link to previous Iowa Banking Law Blog article.  After withdrawing its bid to create an industrial loan corporation in March, Wal-Mart seems intent on offering a broad range of financial services through other avenues.

       Will prepaid and other payment methods linked with cellphones be the future of banking?  Will new banking technology have the same effect on the banking industry that the internet had on newspapers?  Will the new Nonbanks be Viral Banks?  These are the questions that immediately come to mind.