NEW YORK — Walmart is delving deeper into financial services at its stores and shaking up the money transfer business.
The world’s largest retailer introduced a new money transfer service Thursday that it says will cut fees for its low-income customers by up to 50 percent compared with similar services elsewhere. The Walmart-2-Walmart service is being rolled out in partnership with Ria Money Transfer, a subsidiary of Euronet Worldwide Inc.
Shares of MoneyGram and Western Union plunged almost immediately Thursday after the announcement.
The service, which will be available starting April 24, allows its customers to transfer up to $900 to and from more than 4,000 Walmart stores in the U.S.
It’s a huge footprint that could reshape that industry and is likely to set off a pricing battle.
Customers can transfer up to $50 for a $4.50 service fee and up to $900 for $9.50.
Comparable services elsewhere cost up to $70 when transferring less than $1,000, according to Walmart.
Western Union on its website puts the price of transferring $900 in New York between $20, if using a bank account, to $85 using a credit or debit card.
In 2007, Walmart abandoned plans to secure a bank charter, but it has been creating financial offerings for customers, aimed at those with limited access to banks. Walmart already offers prepaid cards, check cashing services and tax preparation services.
Shares of MoneyGram International Inc., which could get hit the hardest, fell more than 15 percent to $15.25 in midday trading. MoneyGram currently provides money transfers to Walmart. The stock of Western Union Co., its rival, fell nearly 6 percent to $15.19. MoneyGram could not be reached for comment. But in a statement emailed to The Associated Press, Western Union said, “Our retail product and service offerings today are already quite diverse.”
Western Union noted that people can send money in minutes or the next day from a retail agent location or online and they can also send money directly into a bank account.
“The company is well positioned in the U.S. domestic money transfer space, having offered a fee of $5 for $50 since 2009,” Western Union added.
Walmart is trying to increase foot traffic after seeing comparable-store sales decline for four consecutive quarters.
The Walmart-2-Walmart service may help stem that trend.
Daniel Eckert, Walmart’s senior vice president of services, said that the move into money transfers gained momentum after company officials heard complaints from customers about high fees elsewhere.
“Walmart-2-Walmart brings new competition and transparent, everyday low prices to a market that has become complicated and costly for our customers,” Eckert said.
Shares of Walmart Stores Inc., based in Bentonville, Ark., rose 32 cents to $77.54 Thursday.