Walgreens Adds Banking to its Financial Services

Need to Know

• The drugstore chain will launch a new bank account for customers online and at its 9,000 stores in the second half of 2021.
• Walgreens will issue the accounts, which will come with a Mastercard-branded debit card that leverages InComm Payments’ platform, through South Dakota-based MetaBank.
• Earlier this year, Walgreens announced plans to issue its own credit cards and prepaid debit cards.

Analysis

Walgreens is planning to launch a bank account for customers, the pharmacy chain announced this week.

The bank accounts are part of an ongoing, 12-year partnership between Walgreens and InComm Payments, a leading global payment technology company. Walgreens will issue the accounts through South Dakota-based MetaBank, with a Mastercard-branded debit card that will use InComm’s banking-as-a-service platform. The debit card will allow account-holders to earn myWalgreens Cash rewards on all purchases, part of the myWalgreens customer loyalty program that the company launched in November 2020.

The Walgreens bank account is expected to be available at nearly 9,000 Walgreens stores and online in the second half of 2021.

“Walgreens is committed to helping customers with their health and well-being needs, and we’re pleased to expand our financial services offerings to further enrich the experiences and ways we meet customers’ financial needs,” said John Standley, president, Walgreens. “We look forward to exploring and introducing even more customer-focused health and well-being payment initiatives in the near future, while creating new revenue streams.”

Stefan Happ, president of InComm Payments, said the bank accounts “will establish Walgreens as a destination for financial services, building on Walgreens’ legacy as a one-stop shop for pharmacy and convenience.”

In addition to facilitating the launch of Walgreens’ bank accounts, InComm will work with the pharmacy chain to relaunch its gift card program. InComm will launch Walgreens’ digital gift cards, and facilitate broader distribution of the Walgreens gift card across various channels, including e-comm and business-to-business.

The announcement from Walgreens come as a number of other retailers have shown interest in entering the banking space. In January, Walmart announced plans to launch a new fintech startup with Ribbit, the venture capital firm. Walmart will have a majority ownership stake in the as-yet-unnamed fintech, which will be offered in addition to its existing financial services, which include the Walmart Credit Card, Walmart Money Card (a reloadable debit card), check cashing, and money transfers. And last month, Ikea acquired a 49% ownership stake in Sweden-based Ikano Bank AB, enabling the furniture retailer to offer a wider range of consumer banking products to its customers, including online banking services (Ikano currently provides Ikea’s store card, in-store interest-free credit, and loans).

The news from Walgreens comes on the heels of a number of digitally-focused advancements and innovations from the pharmacy, stemming from a $1 billion digital investment the company made in 2018. These include the launch of an internal digital healthcare startup which, according to Walgreens global CFO James Kehoe, will “allow patients to choose how they want to manage their healthcare, whether digitally or in-person, making the experience personalized for patients. It will also provide a marketplace that allows patients to find and get care.” In January 2020, Walgreens revealed that its mobile app had been downloaded 60 million times.