Editorials

editorial

Walmart check-cashing serves the ‘underbanked’

David L Ryan/Globe Staff

When Walmart applied in 2006 for the authority to cash checks in its Massachusetts stores, bankers raised red flags. They warned that the nation’s largest retailer was trying to enter the banking business through the back door, evading regulations. “Walmart wants people to cash their checks in their stores so they can then make impulse purchases in the store,” a spokesman for the Massachusetts Bankers Association declared. “We don’t think this is a good service for consumers.”

At the time, Walmart was already cashing checks in most other states, as well as selling other financial services, such as bill-paying and money orders. There was little reason to doubt that what worked for consumers elsewhere would work in Massachusetts, and regulators gave Walmart a green light to open “money centers” at its 40-plus stores statewide.

Advertisement

Eight years later, it’s clear they made the right decision.

As the Globe’s Deirdre Fernandes recently reported, Walmart today is the dominant check-cashing operation in Massachusetts, with about 30 percent of the state’s check-cashing facilities. Some companies charge as much as $25 to cash a check; Walmart charges $3.

Get This Week in Opinion in your inbox:
Globe Opinion's must-reads, delivered to you every Sunday.
Thank you for signing up! Sign up for more newsletters here

That’s not a replacement for banking services for unemployed and low-income people, but it’s a vast improvement over many of the storefront check-cashing outfits that prey on desperate customers in poor neighborhoods. Walmart, which has taken some well-justified hits from local leaders on its employment practices, deserves credit for bringing needed competition to the check-cashing business.

More coverage:

More relying on Walmart financial services

More editorials

Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
We hope you've enjoyed your free articles.
Continue reading by subscribing to Globe.com for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com