Wal-Mart has a new way for consumers to send money across the U.S., with simple fees the retailer says cost as little as half as much as “similar offerings on the market.” Ironically, though, one of the other products it undercuts is also offered by Wal-Mart. Let me explain.

Wal-Mart Stores tried to open its own bank in the past, and the banking industry howled loudly. Wal-Mart last dropped its banking application in 2007 and instead has focused on signing up partners to offer financial services. The retailer now works with American Express and Green Dot for prepaid cards and offers international money transfers through MoneyGram International and Xoom, credit cards via GE Capital, and online bill payment through MoneyGram and CheckFreePay. More than a thousand branches of other banks have outposts in Wal-Mart stores.

Note how Wal-Mart’s partners tend to comes in sets of two, a move that gives the retailer more leverage over suppliers to offer lower-cost products. That brings us back to the new domestic money transfers. Wal-Mart had already offered ways for customers to send money within the U.S. through MoneyGram under a contract that Daniel Eckert, senior vice president of services for Walmart U.S., says still has three more years, so this new offering is in some ways direct competition.

The MoneyGram transfers could be sent between Wal-Mart stores or through other locations. By limiting the new transactions to only between stores—a “skinnied-down offering” in Eckert’s words—Wal-Mart was able to negotiate a product with Ria, a Euronet subsidiary, with just two fee tiers and at a lower cost. The new offering, called Walmart-2-Walmart Money Transfer Service, costs $4.50 to send up to $50 and $9.50 to send $50 to $900. Transfers via MoneyGram can cost as much as 8 times more. News of the new competition sent MoneyGram’s shares down as much as 21 percent this morning.

The focus on lower prices in its physical stores goes back to a core reason Wal-Mart is even pursuing financial offerings in the first place. Eckert says Wal-Mart is interested in expanding its bank-like products less as a standalone business than as a way to create a “one-stop-shop atmosphere” in the stores that drives traffic and spending. He says the company has chosen to avoid “complex financial services,” such as mortgage lending, and instead has focused on “transaction-based” offerings that can be done in a store. That also probably helps explain why its prices generally beat out competitors and its financial services offerings still make up less than 1 percent of its U.S. revenue.

Eckert wouldn’t say what other financial products may be in the works, though he was quick to emphasize that “we have no plans for, and decidedly are not pursuing, an actual bank charter.” And as the new transfer offering shows, there are advantages to not going it alone.

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