Wal-Mart launching money transfer service

Wal-Mart Stores said Thursday it will partner with Ria Money Transfer to launch the Walmart-2-Walmart Money Transfer Service, a program that will allow customers to transfer money to and from more than 4,000 of its stores.

Through the service, customers can transfer as much as $50 for a $4.50 fee, and up to $900 for a $9.50 fee. Customers are limited to transferring $900 per day.

The retailer said the idea for the service, which begins on April 24, was sparked by customers asking why money transfers were so expensive. Wal-Mart said the service costs as much as 50 percent less than other options available on the market.

Shares of Western UnionXoomGreen Dot and MoneyGram all fell after the news.

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“After listening to our customers complain about the high fees and confusion associated with transferring money, we knew there had to be a solution,” said Daniel Eckert, senior vice president of services for Wal-Mart U.S.

Getty Images

Getty Images

Wal-Mart, the world’s largest retailer, said the system could bring more shoppers into its stores, but that wasn’t the focus of the program. The discounter emphasized that it is a way to leverage its footprint to provide a convenient option to its shoppers. The service is currently only offered in-store at its domestic locations, and can be done in 10 minutes or less.

An estimate on Western Union’s website said that in the New York City area, an in-person pickup for a $400 cash transfer that is paid for with cash, and available for pickup in minutes, costs $28.

Wal-Mart already offers a money transfer service through MoneyGram, a partnership that has existed for more than a decade. MoneyGram will still be available to shoppers, particularly those looking to send more than $900 at a time—the cap for Ria’s service, due in part to regulatory requirements regarding identification.

Wal-Mart recently signed another three-year contract with MoneyGram, which lasts until 2016.

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The retailer already offers check cashing, money orders and services for tax preparation.

Ria Money Transfer is a subsidiary of Euronet Worldwide, a processor of electronic financial transactions.

Wal-Mart, which logged its fourth-straight domestic same-store sales decline in the most recent quarter, saw its shares tick slightly higher in early Thursday trading.

—By CNBC’s Krystina Gustafson.

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