Will Wal-Mart's banking push into Canada succeed?
Newly-licensed Wal-Mart Canada Bank may have started out with a rewards MasterCard this week, but the low-price retailing giant is really setting its sights on the big banks’ hold on other products such as loans and mortgages.
Good luck with that.
And while brands like President's Choice and ING do have a sliver of market share, it's going to be an uphill climb for the often-crticized discounter, despite its 318 stores and a deserved reputation as a category killer in other areas.
Nonetheless, the discounter’s low-cost business model could provide new competition to other major players. And its initial card offering is just a bit different from other popular rewards programs.
Shoppers can earn rewards equivalent to 1% of the value of a purchase anywhere MasterCard is accepted, with a .25% bonus of any purchase made at Wal-Mart itself.
In addition, there’s no annual fee, rewards are in dollars rather than points, and you can cash in your savings for purchases of as little as $5.
The Canadian credit card is also different from Wal-Mart’s Discover card in the U.S., which only allows up to 1% cash back on purchases. The U.S. card also uses a tiered rewards system, where total spending has to reach $3,000 in a year to receive the top tier.
Would you see yourself doing more business with Wal-Mart if it starts offering items like high-interest savings accounts and GICs, for instance?
By Gordon Powers, MSN Money