A Requiem for Sam's Bank

19 Pages Posted: 13 Mar 2008 Last revised: 14 Apr 2008

See all articles by Ronald J. Mann

Ronald J. Mann

Columbia University - Law School

Date Written: February 26, 2008


This paper situates Wal-Mart's failed application to form a banking subsidiary in the context of payments policy. Generally, I argue that permitting Wal-Mart to have a bank would have a salutary effect on the relatively uncompetitive market for payment networks. The dominant position of Visa and MasterCard, in which payments are priced above cost to subsidize credit, inevitably will give way to a world in which payment services are priced at cost, or even below cost as a loss-leader to attract customers to other goods and services. Entry into this market by Wal-Mart would be likely to spur more robust competition and thus lower pricing more rapidly.

Suggested Citation

Mann, Ronald J., A Requiem for Sam's Bank (February 26, 2008). Available at SSRN: https://ssrn.com/abstract=1098276 or http://dx.doi.org/10.2139/ssrn.1098276

Ronald J. Mann (Contact Author)

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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