UPDATE 3-Wal-Mart, Amex team up on card for lower-income shoppers

(Adds details on rivals, stock activity, analyst comment)

Oct 8 (Reuters) - Wal-Mart Stores Inc and AmericanExpress Co have teamed up to provide financial servicesto customers who often do not have traditional bank accounts byoffering a prepaid debit card called Bluebird.

The Bluebird will allow for deposits by smartphone andmobile bill paying, with no minimum balance or monthly, annualor overdraft fees, the companies said on Monday.

"Bluebird is our solution to help consumers who currentlymay be poorly served by traditional banking products," said DanSchulman of American Express. "In an era where it isincreasingly 'expensive to be poor,' we have worked with Walmartto create a financial services product that rights many of thewrongs that plague the market today."

Shares of prepaid card companies Green Dot Corp andNetSpend Holdings Inc fell 18 percent and 7 percent,respectively On Monday.

The entry of bigger players with deeper pockets into thelucrative prepaid card market has hurt business of the companiesthat pioneered these products.

Wal-Mart, the world's largest retailer, has long tried toserve its lower-income shoppers who have little or no access tocredit. It offers check-cashing at low rates and other servicesas it tries to appeal to shoppers without bank accounts.

SW Retail Advisors founder Stacey Widlitz noted that dollarstores - which include Family Dollar and Dollar Tree

- have been trying to wrestle market share from Walmartby adding more groceries and payment types.

"But Walmart isn't lying down and taking it quietly,"Widlitz said. "The Amex card is another way to appeal to thelow-income consumer."

Bluebird will be available next week online and in more than4,000 Walmart stores in the United States, they said.

American Express has been testing this program since latelast year.

Users will be able to put money onto the card throughpayroll direct deposit, remote check capture with a mobileapplication, with cash at a Walmart register, or by linking to abank account.

Cash withdrawals from American Express' ATM machines carryno fees or surcharges for customers enrolled in direct deposit.For those without direct deposit, withdrawals are $2. Forout-of-network ATMs, each withdrawal is also $2 and additionaloperator fees may apply.

Walmart has said in the past that about 85 percent oftransactions at its U.S. stores are paid for with cash.

Green Dot shares slid $2.24 to $10.61 on the New York StockExchange, while NetSpend was down 75 cents at $10 on the Nasdaq.Wal-Mart's shares gained about 14 cents and American Expressshares were largely unchanged.

(Reporting By Martinne Geller and David Henry in New York;Editing by Gerald E. McCormick and Maureen Bavdek)

((martinne.geller@thomsonreuters.com)(646 223-6023)(ReutersMessaging: martinne.geller.reuters.com@reuters.net))