Is the Bluebird Card a Game Changer?

Is the Bluebird Card a Game Changer?

Yes, Walmart and American Express have introduced a product that changes the game, appealing to those who are underbanked, those who are tired of paying for services in a prepaid card, and those who seek the services and protections offered by American Express.

In early October 2012 Walmart and American Express announced the launch of Bluebird a new, less expensive type of prepaid card that comes with a range of features similar to that of a traditional checking account.  The partnership of the two firms creates market opportunities for each while providing lower income consumer’s access to financial services they may not have been able to previously afford due to fees and minimum balance requirements.

Bluebird was designed as an alternative to debit and checking accounts with an eye on helping consumers better manage their everyday finances.  It provides advanced capabilities normally not associated with a prepaid card, such as mobile bill paying and allowing deposits via smartphone applications.   Additionally, this new entry into the prepaid card market comes with remarkably few fees, no minimum balance requirements, no charge for reloading the card, and no monthly, annual or overdraft charges.  With many consumers indicating they feel they are not getting value from traditional checking account and debit services due to the associated costs ($259 per year on average according to an independent study by Bretton Woods} this card will be appealing not just to the “underbanked” low income strata, but to anyone tired of overpaying for services that they can now get for free. 

By aligning with American Express, Walmart ensures its Bluebird carriers will have a wide range of opportunities to use the card, as it will be accepted everywhere Amex is.  With Bluebird’s functionality built upon the digital payment capabilities of the American Express’ Serve platform and Bluebird users receiving Purchase Protection, Roadside Assistance, Global Assist Services, fraud protection and 24/7 customer support, other prepaid card providers as well as banks that provide checking and debit accounts will have to scramble to adjust to a competitor that has changed the rules of the game.  No longer are people stuck with a limited number of options, all of which carry fees.  According to Anisha Sekar, vice president for credit and debit products at NerdWallet.com, "This is incredibly cheap. This is one of the best, if not the best, options for prepaid cards."  The markets apparently agree with Mr. Sekar’s assessment, as several of the more established prepaid providers saw their share prices plummet upon the announcement, with Green Dot Corp being particularly hard hit, losing 20% in a single day of trading.

This card is yet another in a long line of financial services Walmart now offers its customers; previous Walmart banking features include check cashing, domestic and international money transmission, walk-in bill payment and gift cards.  Now, with Bluebird added to their portfolio, every Walmart cash register is the equivalent of a bank teller as patrons can both load money onto their card using cash at any Walmart location, as well as pay for goods and services or receive money back as if at an ATM.  For American Express, the benefits of this partnership include a 4,000 store portal to millions of new customers as well as the opportunity to greatly expand their merchant network, the size of which currently lags behind both Visa and MasterCard. 

See this article for an opportunity to use your Bluebird card to accumuate tons of frequent flier and hotel points.

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Editorial Disclosure: Opinions expressed here are those of the author, and have not been reviewed, approved or otherwise endorsed by any bank advertiser, card issuer, airline or hotel.

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