Walmart to Launch Fintech Startup
Earlier this month, retail giant Walmart announced a strategic partnership with Ribbit Capital to create a fintech startup aimed at expanding Walmart’s financial services offerings for customers and employees. The fintech startup will be mostly owned by Walmart, and its board will be made up of several executives like Chief Financial Officer Brett Briggs and CEO John Furner, as well as other independent industry experts.
In a press release announcing the creation of the startup, Furner said that “millions of customers have put their trust in Walmart to not only save them money when they shop with us but help them manage their financial needs. And they’ve made it clear they want more from us in the financial services arena.”
Ribbit Capital is a global investment firm that has backed other fintech startups like Robinhood, Credit Karma, and Affirm.
“Walmart has a relationship with millions of customers and associates built on trust, security, and integrity,” said Meyer Malka, Managing Partner at Ribbit Capital. “When we combine our deep knowledge of technology-driven financial businesses and our ability to move with speed with Walmart’s mission and reach, we can create and deliver financial offerings that are second to none,”
Walmart interacts with millions of customers every year, including some that are financially underserved. CNBC emphasized that six percent of adults do not have a checking or savings account, and about 16 percent are underbanked.
Walmart has offered financial services to its customers in the past, including working with Goldman Sachs’ digital bank Marcus to make financial products more accessible to small- and medium- sized businesses that sell on the company’s marketplace. It also collaborated with Green Dot to launch a reloadable debit card and fintech accelerator to develop innovative services and products.
While Walmart will face challenges distinguishing itself from its competition, marketing is a built-in advantage. Business Insider highlighted that with more than 4,700 Walmart stores and nearly 600 Sam’s Club stores in the United States, there is plenty of space to advertise. It can also use its existing financial services like the reloadable debit card to increase exposure.