Shares of Western Union (WU) and MoneyGram Internation (MGI) dropped sharply in Thursday morning trading after Walmart (WMT) announced a new service allowing customers to transmit money among its stores. WU stock fell about 4%, while MGI shares tumbled more than 15%.
The nation’s largest retailer will offer its Walmart-2-Walmart Money Transfer Service at locations across the U.S. beginning on Apr. 24. Walmart says it will charge as much as 50% less for money transfers, compared to competitors. The new service is a partnership between Walmart and Euronet Worldwide (EEFT). The news was blow to MoneyGram, which has been providing existing money transfers at Walmart Stores. Those transfers comprised 27% if MGI’s total 2014 fee and investment revenues, the Wall Street Journal notes.
Walmart has been moving more deeply into financial services, permitting customers to transfer money, cash checks and make bill payments through financial service centers at Walmart locations.
WMT stock gained modestly in Thursday morning trading. Walmart stock closed at per share on Wednesday. EEFT stock jumped more than 4% on the news.
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