Bluebird: Amex, Walmart Offer Alternative to Free Checking

Simon Zhen

By , Staff Writer
Posted on Tue Oct 9, 2012, Last Updated on Tue Oct 9, 2012

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Bluebird: Amex, Walmart Offer Alternative to Free Checking

Walmart source

American Express and Walmart have partnered on an offering that could set the stage for new prepaid cards and checking-account alternatives. After a pilot earlier this year, the two companies decided to launch Bluebird — a prepaid account — nationwide.

Bluebird has no activation fee or monthly fee. Customers can load funds through direct deposit, a linked bank account, cash reload at any Walmart register or mobile check deposit with the upcoming Bluebird mobile app. There is a $2 fee for loading with a debit card at the register.

With direct deposit, customers can access the MoneyPass ATM network for free. MoneyPass operates 22,000 ATMs throughout the country. Without direct deposit, all ATM transactions come with a $2 fee, in addition to charges by ATM operators.

There are no fees for live phone customer service, replacement debit cards, foreign transactions or account inactivity.

In early 2013, the service will expand to include new ways to deposit funds and write checks.

Starting next week, consumers can go online to sign up for a Bluebird account (free) or visit a Walmart store to purchase a Bluebird setup kit for $5.

Regulations lead to more prepaid accounts

“The advent of technology, regulatory changes and evolving consumer demand is changing the financial landscape and American Express is addressing that with products such as Bluebird,” said Dan Schulman, group president of enterprise growth at American Express, in a media conference call.

New financial regulations, introduced last year, reduced the revenue that big banks generated from debit-card transactions. In response, many of the large banks increased monthly fees on checking accounts and raised minimum balance requirements to avoid those fees.

The Bluebird account is intended to be a low-cost alternative to the traditional checking account. Prepaid accounts are not governed by the new regulations that affect checking accounts.

Funds deposited in the Bluebird account are not insured by the FDIC. However, due to regulations governing American Express’s money-transmittal operations, American Express is required to hold assets to cover all deposits in Bluebird accounts, Schulman said.

The online banking unit of American Express does offer an online savings account and certificates of deposit (CDs) but it does not offer a checking account. Last summer, American Express introduced a prepaid card with a low-cost fee structure.

Walmart also has its own prepaid card, called MoneyCard, through a partnership with Green Dot.

Both prepaid card programs will continue to exist along with Bluebird.

The Bluebird account was piloted in select states earlier this year. These pilot accounts are being terminated on Dec. 8, 2012. Current customers can either spend the entire account balance or request refund check for the remaining balance. Customers can then sign up for the new Bluebird account.

Free checking in another form

The Bluebird account represents the latest stage in the evolution of the prepaid market. For the longest time, prepaid accounts were provided by third-party companies to cater to Americans who didn’t have traditional bank accounts. Now, prepaid cards and accounts serve a group of consumers who don’t want to deal with the rising costs of traditional banking.

For instance, Chase, the largest bank in the country, launched its own prepaid card this summer that might as well be a checking account with a fixed $4.95 monthly fee. It comes with most of the features and amenities of a regular checking account — including mobile banking, mobile check deposit and free access to Chase ATMs.

While Chase’s prepaid card is already one of the better prepaid offerings, Bluebird may turn out to be better. Consumers who’ve lost free checking may find Bluebird to be a viable alternative. With no credit checks, no monthly fees and no inactivity fees, anyone can sign up for a Bluebird account and begin conducting most financial transactions that are available through a bank.

Bluebird may even steal the thunder from community banks and credit unions, places that have been praised for offering less-costly checking accounts.

Future prepaid cards and accounts will have to compete with Bluebird. If new prepaid products are able to offer similar features and cost structures, we could see a major shift in the accounts that consumers use for “banking.”

 

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  • Tom84

    Target has a better American Express card then walmart.

    • http://www.mybanktracker.com Alex Matjanec

      Surprised to hear you think the Target / Amex card is better. Unlike the Bluebird, the Target card carries a $3 ATM fee vs $2 and $3 reload fees at Target vs nothing when reloaded at Wal-mart.

      Let us know if we are missing anything.

      • yedla

        That’s true..nothing is offered for free :-)

  • pkt72

    Simply put – Non-FDIC covered = Scary.
    American Distress is having trouble with collections, so getting a deposit base helps bridge the investments gap. With no FDIC coverage, consumers are taking a risk without full disclosure of this non-insured risk.

  • DAVID

    Walmart AMEX Bluebird card is a complete rip off!!! They charge $5 for the starter kit and then once you load money and you go somewhere to use the card, The card cannot be read therefore accepted but yet money is missing from the card and the website does not show where money was spent, Good luck trying to get in touch with customer service over a 30 minute wait to speak to someone in India who cant do anything for you nor understands the problem, this card is a complete scam!!! BEWARE

    • Dot2Dot

      I too spoke with Philipino or some other nationality customer rep. After 4 attempts at trying to get card active thru email validation… which I never recieved I called their number. Note: they have NO way to contact them other than a phone call. Weird for a internet based company. Got absolutely no where with the rep… he kept repeating same sentences from a script. Finally asked account be cancelled… his reply “Whatever”! Sad to think AE would put their reputation behind something this amateur. I’m just hoping I haven’t opened myself up to a boat load of scams! Fingers-crossed!

  • william

    BLUE BIRD IS FOR THE BIRDS.

    I liked most of the things I have heard mainly from their commercials and info published. I guess I would be the idiot for not checking reviews first. I went to pull 500 out of the a PNC atm, which by the way is the only method of retrieving my funds as they have no bank to visit, have no atm of their own and every other atm would charge a fee. The atm declined to offer me my funds which I had checked one minute prior to ensure were in there. It gave me receipts for each time I tried stating the action selected is not currently available. On my way to work in a rush I checked my account and lone and behold the money was removed from my account. I called them and was greeted by the same foreigner who was only able to dispute the charge and I would have to wait 6-8 months to hear back from them. The funds were to add to my account in which I pay my rent out of. I will now be short and be charged 160 for being late. Judging by the poor manner in which they try and assist their customers I will not get that back. I would only be so lucky just to get the funds replaced to my account if that ever happens. They state direct deposits are posted very quickly, it actually took the longest out of any debit card I have ever had. This just adds to the giant inconvenience.

    -NO BANK TO VISIT
    -MOST ATM’S WILL CHARGE YOU A FEE
    -SLOW DIRECT DEPOSIT
    -CUSTOMER SERVICE WHICH SHOULD BE RENAMED CUSTOMER INCONVENIENCE

    ALL IN ALL PLEASE NEVER USE THIS CARD ITS A WASTE OF TIME.
    AMERICAN EXPRESS SHOULD REALLY LOOK INTO THIS AND ALL THESE MATTERS BEFORE ALLOWING THERE NAME TO BE PRINTED ON THE CARD

  • chris

    they are a total rip off will remove money from your account at will

  • bm

    Bluebird is a giant pain in the ass!! Try and deposit a check with your smartphone and you will find out that it never takes a clear enough picture so they won’t accept the deposit and with no bank to take it to where can you deposit your check? Guess what you can’t unless you take it to a bank and deposit there then transfer it, but when you do that they take 6 to 8 business days to transfer the money into your Bluebird account even though the money is instantly debited from you bank account. Where is that money for 6 to wight days? I’ll tell you where it’s at Amex is using your money free of charge for those days!!!!!!!!!!!!!!!!! I have contacted my state attorney general, I hope more people do the same.

  • Des

    Once you read, “Funds deposited in the Bluebird account are not insured by the FDIC”, you should stop reading the article and find a safer place to keep your money.

  • mz_c

    I ordered my card online and activated my card in November. I wanted it for online shopping.I have been fortunate to have had no trouble. In the beginning I could load the card at the check out but now have to go to customer service instead.I use a second card for sliding the grandson funds.That has worked out well for us.I do wish they had chat or email for easier access to customer service.I think I get my money’s worth.For the stores that don’t take American Express I use my PayPal card.