• by Sarah Mahoney , August 27, 2009

Wal-Mart Stores says it will allow customers without checking accounts to pay all their bills at Walmart stores, potentially saving them hundreds in fees each year.

Wal-Mart, which has been increasingly targeting the low-income demographic with financial services, says shoppers can pay for utility, landline phone, cable/satellite, credit card bills, auto and wireless phone bills at Walmart MoneyCenters and customer service desks.

The Bentonville, Ark.-based retailer, which has been rebuffed in the past in its efforts to go into the banking business, says its research reveals that the new service will cut the time customers typically spend tending to such bills in half, and collectively, save American families as much as $100 million in bill-pay fees this year.

Because of the recession, the number of "unbanked" consumers is growing, and Wal-Mart says it believes more than 21 million households pay at least one bill in person every month. Other studies have estimated that more than 22 million Americans have no checking account, with African-Americans four times more likely to be unbanked than whites, and as many as one-third of Latin Americans.

The costs are steep: Some groups estimate the average person without a bank account spends about 5% of income at check cashers each year, ranging from $800 to $1,200 per year. (Of course, having a checking account isn't cheap, either. Bankrate reports that banks are charging record fees for bounced checks and ATMs, as well as raising fees for online features.)

"We're introducing Walk-in Bill Pay nationwide to provide another affordable money service option that will help families manage their monthly budgets so that they can save money and live better in these tough economic times," the company says in its release.

Wal-Mart says its study, conducted by Aite Group, finds that paying bills in person "remains mainstream among a large segment of Americans who make less than $45,000," and that often such shoppers use third-party walk-in bill payers, which allow them to pay with cash, get a printed receipt, and of course, hang on to their money longer than if they paid by check.

Wal-Mart says its bill-paying fees are significantly lower -- typically half as expensive as those charged by third-party stores. For example, it charges $3 for cashing checks, and 60 cents for a money order.

Several years ago, Wal-Mart introduced a prepaid Visa card, and other retailers have been extending services for lower-income shoppers as well. For example, while Wal-Mart phased out its layaway plan in 2006, stores like Sears (and its Kmart division) and TJMaxx (as well as its Marshalls unit) brought it back late last year.