In response to the changing financial-services landscape, retailers in the U.S. continue to expand their lineup of alternative financial services. Offering these services to shoppers is not an entirely new trend; however, retailers are increasingly savvy and multifaceted with their approach. They’re becoming one-stop shops for basic financial needs. For example, many grocery and big-box retailers offer basic check cashing services for their unbanked and underbanked shoppers. Recently, I spotted the following display at a Denver King Soopers grocery store.
Need to cash a check and get a money order? No problem. King Soopers will even throw in the eggs for free. The offer links basic money services to the grocery necessities that unbanked and underbanked shoppers need.
Retailers have offered store credit cards to shoppers for years with great success, but there will always be shoppers who do not want another credit product. How can retailers successfully add a card to the wallet of a credit-card-adverse shopper? Target addressed this situation with a Target REDcard debit card, which links directly to a shopper’s existing bank account. Whenever a purchase is made at Target, the shopper still receives the benefits of the REDcard, but the purchase amount is taken directly from their bank account—no need to keep track of another credit card statement.
What if a loyalty and a prepaid card were combined into one? That is exactly what Walgreens is doing with the rollout of the Balance Financial Prepaid MasterCard. Currently only available in a handful of test markets, the card combines the best of the Walgreens reward program and a prepaid card.
Retailers continue filling gaps that exist in the financial-products marketplace with more clever alternative financial-service products. Needs that were once met by banks or check-cashing stores are now increasingly being served by retailers. In what other ways can retailers provide alternative financial services that will appeal to shoppers?
Image Sources: Integer ShopPic™ Library, Target.com, and Balancefinancial.com
