The unbanked should, as a rule, get bank accounts – they’re very good
things to have. Even if your local branch of SuperMegaBank isn’t interested
in your double-digit net worth, it’s not hard to find a financial institution
who’ll happily take it, especially if you live in the vicinity of a community
development credit union.
For many reasons, however, there remain millions of people in this country
who do not have a bank account and who are thereby ripped
off by products such as Wal-Mart’s MoneyCard.
So I have mixed feelings about the BanXcard,
a new product which is indubitably better than the MoneyCard. On the one hand,
I’m very happy that a prepaid debit card exists which isn’t nearly as much of
a rip-off as the MoneyCard is; on the other hand, I’m sad that such a product
has to exist in the first place, and that there remain many individuals who
will use it who would be much better off with a simple bank account.
This page has a
handy chart showing the BanXcard’s superiority over the MoneyCard. And the BanXcard
also does things which the MoneyCard doesn’t do at all, like allow you to deposit
personal checks. (They take a couple of days to clear, which is perfectly reasonable.)
At the moment, BanXcard doesn’t seem to be as widely available as the MoneyCard
will be – it’s hard to compete with Wal-Mart’s distribution network. But
you can order one by phone (877-687-2269), and it might soon be available through
companies with a lot of low-wage employees, such as Tyson, who can distribute
and pay into cards rather than giving out expensive-to-cash checks.
For immigrants, every BanXcard comes with a second card, which can be posted
to a relative overseas, who can then withdraw cash at their local ATM for much
less than a normal remittance fee. And for everybody, a BanXcard is a lot safer
than cash, which is the chief alternative: no one’s pitching a BanXcard as an
alternative to a low-cost bank account.
I’d really love for these products to be made moot by the financial-services
industry, but unless and until they are, I’m glad that BanXcard is giving Wal-Mart,
not to mention the check cashers, a real run for their money.