The US retail chain is launching a new bank account for its customers that will be offered online and in-store, per Bloomberg. Accounts will be issued through South Dakota-based MetaBank and will come with a Mastercard-branded debit card. The announcement furthers Walgreens’ push into financial services after it indicated earlier this year that it would be rolling out credit and prepaid debit cards.
Walgreens’ physical footprint and baby boomer-friendly mobile app could help fill the gap left by branch declines. Here are two reasons why:
Larger retailers offering banking services are uniquely positioned to cater to underbanked customers—which could spell bad news for neobanks. As of 2019, over 20% of the US population remained un- or underbanked. Digital challengers have responded accordingly by introducing new features aimed at the underserved market, but drugstores, discount retailers, and similar locations are well placed to become a likely alternative for mass market customers. Like Walgreens, Walmart has a significant footprint in the country and is making its own foray into banking. The two retailers would be able to centralize a customer’s errands in a single location, and they likely have decades of experience servicing the clientele neobanks have only recently turned to.