Dive Brief:

• Mega retailer Walmart has partnered with bill payment fintech PayNearMe and bank technology company Green Dot to provide its customers a new way to pay their bills in cash at its stores starting in August, the companies said in a Tuesday press release.
• With the new PayNearMe/Green Dot service, Walmart customers can make the cash payments at 4,000 Walmart locations by scanning a biller code, the two payment companies said in the release. The service will typically cost about $2.99 per bill, but will vary depending on the biller, PayNearMe executives said.
• Walmart customers already can make cash payments to their billers in-store, but the retailer typically needs account and biller information. “With us, they scan, pay and go,” Laura Rummel, PayNearMe’s senior director for account management and retail partnerships, said in an interview. “That is a much shorter transaction for Walmart.”

Dive Insight:

Walmart is adding the option as it seeks to become a destination for financial services and as a bevy of fintech companies scramble to profit from new payment channels across an increasingly digitized payments ecosystem. 

Walmart in late February poached two top executives from Goldman Sachs who had been leading the investment bank’s consumer-banking arm Marcus. Walmart has since been relatively mum on its work to develop a fintech startup backed by Ribbit Capital. A trademark filing in April with the U.S. Patent and Trademark Office, however, listed a litany of financial services the venture may offer — and may have spilled the name and logo of the secretive enterprise: Hazel.

The move with PayNearMe and Green Dot takes the big-box retailer one step further toward meeting customers’ financial service needs on as many fronts as possible. “Walmart has a strategic initiative to be a destiny for financial services,” Rummel said. 

The new, shorter cash payment transactions will be easier for Walmart employees to process, Rummel said. That would presumably make the new option more cost-effective for Walmart. The retailer didn’t respond to requests for comment. 

Walmart customers can use the service to make payments to companies that regularly bill them, such as utilities, municipalities or insurance companies. The fee for the service is determined by the biller, which may cover the cost of intermediaries, like PayNearMe and Green Dot, or pass it onto the consumers.

The fee for consumers on the majority of transactions is $2.99 per bill, but it can reach as high as $5.99 or be zero if the biller absorbs that cost, Rummel said, noting that the fee varies by company and industry. 

Anne Hay, PayNearMe’s vice president of marketing, said the company is legally prohibited from disclosing what percentage of billers cover the cost for consumers.

Demand for such cash payment services comes from people who might not have a bank account; those whose bank doesn’t offer electronic bill payment; or other consumers who simply don’t trust financial institutions with such transactions, the PayNearMe executives said.

The service can reduce fees for consumers by eliminating the need for cashier's checks and allowing them to pay their bills at one location, they said.

PayNearMe already offers such cash payment services through other major retailers, including 7-Eleven, Family Dollar stores and Casey’s General Stores. Adding 4,000 Walmart locations will mean the service will be available at 31,000 locations, PayNearMe said in its release.

PayNearMe has offered cash payment options since 2009 and expanded those services in its partnership with Green Dot started in 2016. It also offers payment options through major banks’ Automated Clearing House system, and payment channels through tech behemoths Apple and Google. 

Walmart also offers options for customers to pay their bills through the store online with some 15,000 billers. Those fees also vary. That online service is powered by longtime payments industry processors Fiserv, through its CheckFreePay service, and MoneyGram. 

“We are always looking for opportunities to deliver modern and seamless banking and money management solutions that create exceptional experiences for our customers and partners,” said Brandon Thompson, Green Dot’s executive vice president for retail, tax and PayCard, said in the release.