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There’s a growing segment of consumers in Nashville and around the country asking, “who needs a bank when you’ve got Walmart?”

Some are running to the retail giant’s prepaid debit cards after getting burned by bank fees. Others just find them more convenient. They’re all part of Walmart’s surge into the financial sector.

At a place like the downtown bus terminal in Nashville, it feels like almost everyone is armed with the Walmart MoneyCard.

“I love my Walmart card,” says Linda Black, as she pulls the blue plastic from her purse.

Like others, Black has not had a good track record with banks, specifically Bank of America.

“Every time I went there, I’m owing this. I’m owing that. How am I owing and I got money there? What am I still paying?” she says. “So I said forget it.”

Black says with Walmart, she hasn’t run into unexpected fees – just a flat $3 a month.

Lisa Barnes is a waitress who says she’s saving money since overdrafting isn’t even an option.

“You can’t spend what you don’t have,” she says. “You can’t go over. You just don’t get in trouble with it.”

“Do Anything With It”

And the card still has many of the advantages of a bank account, such as ATM withdrawals and direct deposit.

Stacey Nixon is a child care provider who has been sending her paycheck right to Walmart for the last year.

“Fill out a form and your money comes directly on the card,” she says. “You can buy stuff offline. You can pay your bills. You can get the movies from the Redbox. So you can basically do anything with it.”

That’s why Nixon has closed her bank account, technically joining the ranks of the “unbanked.”

The Federal Reserve estimates roughly 60 million Americans do most of their business in cash. The unbanked have long been targeted by companies like NetSpend and H&R Block for prepaid debit cards. But increasingly, it’s bank customers who are moving to services like the Walmart MoneyCard.

Banks’ Fears Come True Anyway

“They are thinking of it as Walmart is where I go to do my money management,” says Ben Jackson, who follows the debit card market for Mercator Advisory Group.

Ben Jackson follows the debit card market for Mercator Advisory Group. He says Walmart has pursued financial services primarily as a way to get customers spending more inside the store. But the banking industry has felt threatened and put up road blocks. Jackson says Walmart has found a back door.

“The banks lobbied very hard to keep Walmart from getting a bank charter and in a lot of ways I think their worst fears came true in that Walmart is still competing with them,” he says.

Walmart didn’t make anyone available for an interview, and the company won’t say how many MoneyCards are out there. But Jackson estimates as many as two million are active right now.

Instead of ceding the ground to Walmart, a few traditional financial institutions are coming out with prepaid offerings of their own. But going toe-to-toe with Walmart isn’t for the faint of heart, says finance professor Richard Grant of Lipscomb University. The retail juggernaut has the ability to keep prices low and the lights on all night.

“Walmart is open a lot longer than just about any bank I know of,” Grant says. “I guess the way to say it is Walmart doesn’t have banker’s hours.”

Grant says banker’s hours may not be safe for long, especially when so many people are excited by the MoneyCard.

“They’re catching on,” says Stacey Nixon. “I’ve got to persuade my momma to do it now.”

Nixon’s whole family could be “banking” at Walmart before long. And there will be more right behind them. Boston-based research firm Aite Group predicts double digit annual growth for prepaid cards through 2014.