by Larry Chiang<\/p>\n
Walmart experiences economics of card processing painfully. Right now it is paying under 2%. In the future, Walmart with its ILC (industrial loan charter) can issue its own credit card.<\/p>\n
An industrial loan charter is a form of credit card bank. The details are hazy to me but the broadstrokes and big picture = this truth.<\/p>\n
Walmart can make money making loans. Right now it is generating receivables to credit card banks that get paid 1.5%. Further money is made when consumers do not pay their balances. Further money is made via debit when consumers accidental use their debit card like a credit card. In short, Walmart is paying banks to give them consumer debt in the form of a credit card receivable.<\/p>\n
Walmart can be paying a negative ten percent interchange versus the 1.4-1.7%. Perhaps this is why department stores do a credit card. Perhaps this is why Blackstone wants to buy Dell computer and then sell Dell Financial Services to GE capital. Remember Dell makes $50.oo of margin on the desktop and about $100++ on the financing.<\/p>\n
Please note: I am guessing and this is my opinion. My expertise is that I read. My experience is that I sell credit cards to sorority girls by first preparing their FICO credit score. I financially benefit from my opinion (I think).<\/p>\n","protected":false},"excerpt":{"rendered":"
by Larry Chiang Walmart experiences economics of card processing painfully. Right now it is paying under 2%. In the future, Walmart with its ILC (industrial loan charter) can issue its own credit card. An industrial loan charter is a form of credit card bank. The details are hazy to me but the broadstrokes and big […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1375","post","type-post","status-publish","format-standard","hentry","category-credit-secrets"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/1375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/comments?post=1375"}],"version-history":[{"count":0,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/posts\/1375\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/media?parent=1375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/categories?post=1375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.duck9.com\/blog\/wp-json\/wp\/v2\/tags?post=1375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}