Wal-Mart Stores said Thursday it will partner with Ria Money Transfer to launch the Walmart-2-Walmart Money Transfer Service, a program that will allow customers to transfer money to and from more than 4,000 of its stores.
Through the service, customers can transfer as much as $50 for a $4.50 fee, and up to $900 for a $9.50 fee. Customers are limited to transferring $900 per day.
The retailer said the idea for the service, which begins on April 24, was sparked by customers asking why money transfers were so expensive. Wal-Mart said the service costs as much as 50 percent less than other options available on the market.
Shares of Western Union, Xoom and MoneyGram all fell after the news.
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"After listening to our customers complain about the high fees and confusion associated with transferring money, we knew there had to be a solution," said Daniel Eckert, senior vice president of services for Wal-Mart U.S.
Wal-Mart, the world's largest retailer, said the system could bring more shoppers into its stores, but that wasn't the focus of the program. The discounter emphasized that it is a way to leverage its footprint to provide a convenient option to its shoppers. The service is currently only offered in-store at its domestic locations, and can be done in 10 minutes or less.
An estimate on Western Union's website said that in the New York City area, an in-person pickup for a $400 cash transfer that is paid for with cash, and available for pickup in minutes, costs $28. However, the company has offered a fee of $5 for up to $50 since 2009, said spokesperson Dan Díaz. It also offers varying fees for transfers depending on whether they are available within minutes, or within one to three days.
"The company is well-positioned in the U.S. domestic money transfer space," Díaz said, adding that domestic money transfer made up approximately 8 percent of the company's total revenue in 2013. That figure includes online money transfer, which he said is growing quickly.
"Today's news is not surprising," Xoom CEO John Kunze said. "Xoom is a digital money transfer company and we will continue to disrupt offline channels to digital channels. ... We have a sustainable and healthy business model and we're committed to giving the consumers the single best experience in money transfer."
Wal-Mart already offers a money transfer service through MoneyGram, a partnership that has existed for more than a decade. MoneyGram will still be available to shoppers, particularly those looking to send more than $900 at a time—the cap for Ria's service, due in part to regulatory requirements regarding identification.
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Wal-Mart recently signed another three-year contract with MoneyGram, which lasts until 2016.
In response to the news, MoneyGram said in a statement, "While Wal-Mart is our single largest agent, and experiences healthy growth, it has been decreasing as a percentage of our revenue for the past five years." In fourth quarter 2013, the retailer represented 26 percent of total revenue.
MoneyGram said it is not taking action over prices at Wal-Mart or other U.S. locations in response to the announcement, but that it will continue to monitor market dynamics and make decisions accordingly. The company said it "remains committed to growing its long-standing partnership with Wal-Mart."
Wal-Mart already offers check cashing, money orders and services for tax preparation.
Ria Money Transfer is a subsidiary of Euronet Worldwide, a processor of electronic financial transactions.
Wal-Mart, which logged its fourth-straight domestic same-store sales decline in the most recent quarter, saw its shares tick slightly higher.
UPDATE: This story has been updated to include comments from MoneyGram, Western Union and Xoom.
—By CNBC's Krystina Gustafson.