Because of my enduring fascination with how retail markets generate value within economies, I am an unqualified admirer of businesses such as Amazon and Walmart. Indeed, my admiration of these two is most evident in the fact that they remain the most cited business institutions on this blog. Of the two, I am especially enamored with the creativity of the Walmart as mentioned here, among other spots on this blog. It has gone beyond its classical business model of low cost retail products and logistics to ensuring that it plays a role in competing against banks in reducing the banking charges that greatly irk many low-income earners.
Andrew Martin and Stephanie Clifford file a piece in the NYT detailing how Walmart utilized customer feedback on their real costs of banking charges. this information was directed towards ensuring that the check cashing costs offered by Walmart are sufficiently competitive to ensure that its share is growing in that area. In my view, the retailer has responded well in not only demonstrating that the fees are not close to the marginal costs as they should be, but also that the competition is adding value by saving money for clients who may save it or use it to acquire more groceries.
To my mind, the move by Walmart in providing an alternative avenue for check cashing is demonstrably useful but also highlights the inefficiencies in the banking charges. The high degree of automation in the financial services industry makes me to think that Walmart may still have a margin even after lowering the costs. Predictably, the banking institutions against whom this new move presents a rising threat respond in a manner that betrays their callousness by asking for Walmart to be regulated too. This posture is baffling to me because one would expect that they would instead ask to be released from regulations in order to be able to compete even further. instead, the argument for regulation in the piece is one that would raise Walmart's costs as opposed to a response that would reduce the banking institution's costs and ensure that costs would stay low. Walmart is beating these banks at their game.
Andrew Martin and Stephanie Clifford file a piece in the NYT detailing how Walmart utilized customer feedback on their real costs of banking charges. this information was directed towards ensuring that the check cashing costs offered by Walmart are sufficiently competitive to ensure that its share is growing in that area. In my view, the retailer has responded well in not only demonstrating that the fees are not close to the marginal costs as they should be, but also that the competition is adding value by saving money for clients who may save it or use it to acquire more groceries.
To my mind, the move by Walmart in providing an alternative avenue for check cashing is demonstrably useful but also highlights the inefficiencies in the banking charges. The high degree of automation in the financial services industry makes me to think that Walmart may still have a margin even after lowering the costs. Predictably, the banking institutions against whom this new move presents a rising threat respond in a manner that betrays their callousness by asking for Walmart to be regulated too. This posture is baffling to me because one would expect that they would instead ask to be released from regulations in order to be able to compete even further. instead, the argument for regulation in the piece is one that would raise Walmart's costs as opposed to a response that would reduce the banking institution's costs and ensure that costs would stay low. Walmart is beating these banks at their game.
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