Always low variable-rate mortages. Always.

Just catching news that Wal-Mart is expanding its banking and financial services.

Over the next year, the company said, it will introduce a prepaid debit card, intended for low-income shoppers, and install money centers — which offer check cashing, bill paying and money order services — in 1,000 stores, up from 225 now.

The move is seen as a precursor to wider offerings, like home equity loans and mortgages, which could turn Wal-Mart into a significant force in the banking world. Jane Thompson, the president of Wal-Mart financial services, called the prepaid cards and money centers “foundational products” that the retailer would build upon.

Given Wal-Mart’s penchant for squeezing costs out of every business it enters — from oil changes to prescription drugs — the move is expected to jolt the financial services business.

The introduction of such services represents an end-run around the federal government, which last year denied Wal-Mart a charter to open a bank amid fears that it would crush smaller financial institutions.

Previously, Wal-Mart had its plans for banking blocked. These plans, on the other hand, don’t require that Wal-Mart have a banking license. It will use 3rd party providers for the financial services that do, while the other services (cheque-cashing, pre-paid cards) are targeting account-less customers. Does this count as predatory? We shall see.

I say if GM can run a financial game, preying on poor pensioners in the UK in the process, everyone should be allowed to. The effects on smaller lenders and other financial institutions ought to be interesting, if Wal-Mart’s achievements in big-box retail are anything to go by.

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