You’ve heard of in-store bank branches? Bluebird does that one better — it turns Walmart stores, all 4,500 of them, into bank branches. Customers can refill their Bluebird accounts, jointly offered by the retail giant and American Express, and perform simple functions such as viewing account balances and adding funds at the checkout counter.

Bluebird has caused a flurry of excitement and anxiety around the financial services sector since its introduction in early October. Sometimes viewed as just another prepaid card, Bluebird more closely resembles a checking account, allowing direct deposit, bill payment, online and mobile banking,  P2P payments, sub-accounts for family members, and even paper checks. In other words, it puts Walmart squarely into the banking business, something Walmart has been pining to do for years.

On top of this impressive feature set, its fees are slight. There are no activation fees (at least online — it costs $5 to activate in-store), minimum-balance fees, or monthly maintenance fees.

“There are only fees for value-added services,” Alpesh Chokshi, American Express’s head of global payment options, told Bank Innovation. There is also a $2 charge for ATM withdrawals, except for the first withdrawal within any given month, which is free.

Bluebird is available online, but the main place customers will be exposed to Bluebird is in one of Walmart’s 4,500 stores and clubs throughout the country. For the next few weeks it will occupy the “power alley” through which customers must walk to reach the rest of the store at many Walmart locations, Chokshi said.

A major TV advertising campaign for Bluebird kicks off next week, Amex officials said.

Bluebird takes aim at both retail checking accounts and the prepaid card space. But if banks often fail to make profits off the “unbanked, underbanked, unhappily banked customers,” as Chokshi referred to the market sweet spot for Bluebird, how will American Express and Walmart make money? It all boils down to physical infrastructure.

“These customers are unprofitable to banks because of the physical branch networks,” Chokshi said. “Branches are expensive to operate.”

Walmarts are expensive to operate, too — but they have a lot more going on than just servicing Bluebird cards. Another large expense for banks is calls to contact centers. Bluebird customers will be able to leverage American Express’s customer service, the same as any other American Express customer.

Funds deposited in Bluebird accounts are not federally insured, but they are backed by the American Express Travel Related Services Company, which has offered customers of Travelers Cheques protection for over a century, Chokshi said.

On Oct. 9, before the Bluebird card was even available in stores, it was named the Best Overall Prepaid Card for 2012 by Cardhub. That’s some impressive advance publicity, but it’s hard to argue with that verdict. With its capacities far beyond that of most prepaid cards, Bluebird could recast what it means to be a prepaid card.