At the Forrester conference in May, I blogged about Wal-Mart trying to get into banking in the US, which has successfully been lobbied into submission.
So here comes the Canadian angle.
Wal-Mart Canada Corp. is looking to expand into the financial services business, a potentially lucrative growth area as the retailing price war intensifies over food, clothing and other consumer staples.
The big-box giant recently hired Trudy Fahie as vice-president of financial services at Wal-Mart Canada, a role created for assessing the retailer’s options in the sector. Ms. Fahie is the former vice-president of financial services for American Express Canada.
“We will be looking at a range of possible financial services to enhance our offering to our customers,” Andrew Pelletier, a spokesman for Wal-Mart Canada, confirmed yesterday, calling the next six months to a year an “exploratory” period. “It’s too early to speculate on what those services will be at this point.
Source: Wal-Mart eyes banking
Numerous Canadian retailers have leveraged their customer bases by offering house credit cards or some banking services.
Canadian Tire, which acquired a banking licence in 2003, announced earlier this month that it would start offering high-interest savings accounts in the test markets of Calgary and Kitchener, Ont. The retailer is expected to later roll out products including mortgages and GICs.
Sears Canada Inc. obtained a banking licence in 2003, but did not extend it beyond credit cards before its financial services division was sold last year to JP Morgan Chase & Co., which is expected to use Sears as launching pad to offer consumer banking services in Canada. And grocery chain Sobeys Inc. has been putting small Bank of Montreal branches inside some stores from Ontario to the East Coast of Canada.
Bankwatch 
3 responses to “Wal-Mart eyes banking in Canada”
Shalom Colin,
Can this in any way be used as an end run around the opposition in the United States?
B’shalom,
Jeff Hess
Have Coffee Will Write
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[…] Earlier I wrote about how Wal Mart’s quest for a banking license in the United States was all but dead on the table (I still don’t give up on the Frankenstein option, with the Bentonvile behemoth, you never know) but then I read this post from a blogging banker: […]
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I have to think it cannot be a co-incidence that Canada and the US are right beside each other. However Canada is tiny (32 million pop) at 10% of the US in population.
When I listened to Susan Faulkner speak she went out of her way to demonstrate that the Wal-Mart efforts were intended to provide synergy with their business model, that included, the “unbanked consumer”, and transactional efficiency to support their own payments. The argument being that this is not a space the banks are active in anway. Of course the American Banks’ don’t buy that.
So the Canadian effort could be an effort by Wal-Mart to demonstrate to the American regulators that the American Banks’ fears are misplaced, and no need to worry.
Time will tell, but these are fascinating plays. My take would be that anything which dilutes the Banks’ efforts is bad for Banks’s but good for consumers. Its not that I think Banks need to go out of there way to encourage competition, but its a fact that competition will drive efficiency and effectiveness. And its no co-incidence that CitiBank are currently peddling their international payments capabilities to the home countries of North American and European immigrants. Banks everywhere recognise that the demographic shifts arising from immigration require strategy changes.
PS … this is a long comment … I will make a new post on this with links.
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[…] I started to reply to a great comment question to this post on Wal-mart, and realised this deserves a post. […]
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