The news: The US retail chain has launched a new bank account, dubbed “Scarlet,” for its customers in partnership with payments technology company InComm Payments.
More on this: Accounts are issued through South Dakota-based MetaBank and come with a Mastercard-branded debit card. Perks associated with Scarlet accounts include:
Scarlet furthers Walgreens’ push into financial services: The firm recently partnered with Synchrony Financial to debut co-brand and private-label credit cards that offer brand-based and health and wellness rewards.
Walgreens’ physical footprint and baby-boomer-friendly mobile app could help fill the gap left by disappearing branches. Here are two reasons why:
Some customers still want to bank in person. The pandemic hastened the adoption of digital banking tools and solidified a broader trend away from branches, but many customers still prefer an in-person option.
Its mobile app was developed with an older user in mind. More than 20% of Walgreens’ app users were ages 55 and older, according to a 2017 study generated by the retailer.
Larger retailers offering banking services are uniquely positioned to cater to underbanked customers—which could spell bad news for neobanks. As of 2019, over 20% of the US population remained un- or underbanked, per FDIC data. Digital challengers have responded to this opportunity by introducing new features aimed at the underserved market—but drugstores, discount retailers, and similar locations are well placed to become a likely alternative for mass-market customers.
Like Walgreens, Walmart has a significant footprint in the country and is making its own incursion into banking. The two retailers could centralize a customer’s errands in a single location, and they have decades of experience servicing a clientele which neobanks have only recently turned to.