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June 16, 2021

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.

Canadian Tire tried the same thing but ending up selling its struggling mortgage portfolio to the National Bank last year. And Citbank just abandoned the Canadian mortgage business as well.

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



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...