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Wal-Mart Goes Big In Fringe Banking

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THE NEXT TOO BIG TO FAIL?
NPR's Planet Money weighs the significance of Wal-Mart's announcement that it will add 400 more money centers in its stores by year's end, adding to the 1,000 existing centers. They aren't banks -- rather, they're for bill paying, check cashing, and pre-paid Visa cards. "That puts Wal-Mart at the center of a potentially big flow of money that's largely outside of the traditional banking sector, Rajesh Narayanan, an LSU finance professor who has followed the company, told me. People get paid at work, bring their check to Wal-Mart, put the money on their pre-paid debit card and spend it. "These things are not big enough to really matter for monetary policy yet," Narayanan told me. But that could change as Wal-Mart opens more MoneyCenters and continues to expand its business. "Remember," Narayan said, "Wal-Mart is 3% of GDP.""
SOURCE:   Planet Money

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