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NEW YORK - Wal-Mart is trying to buy a California bank in hopes that a banking license would lower its processing costs for some transactions, The New York Times reports.
The world's largest retailer claims it does not want to enter the retail banking system. Instead, a spokesman says, the company reacting out of frustration with the high cost of processing of its customers' debit card purchases.
Wal-Mart filed applications with the California Department of Financial Institutions and the Federal Deposit Insurance Corporation last month to acquire the bank, Franklin Bank of California, based in Orange, Calif., according to The New York Times. Franklin has an industrial bank charter, which allows retailers like Wal-Mart who aren't primarily involved in banking or financial services to own a bank. Only a handful of states have these charters, according to the Times.
Analysts note that a logical next move for Wal-Mart would be to offer its own credit card. "If you're going to be in the financial services business you might as well own it," David Robertson, publisher of The Nilson Report, told the Times.