BanXcard: Better Than Wal-Mart, Worse Than Credit Unions

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.