Will becoming a fintech powerhouse make Walmart an even more formidable retailer?
Walmart announced yesterday that it is creating a new fintech startup with Ribbit Capital, a venture capital firm in the space, with an eye toward developing and automating “tech-driven financial experiences tailored to” the needs of its customers and associates.
The retailer, which will hold a controlling interest, did not disclose the new venture’s name nor when it will make its services available. The fintech’s board will be made up of Walmart executives John Furner, president and CEO of the retailer’s U.S. business, and Brett Biggs, chief financial officer. Meyer Malka, managing partner at Ribbit, will be the third member. Plans are in place to add other industry experts from outside to the board. The startup plans to assemble a management team of experienced leaders in the fintech sector and expects that it will grow through partnerships and acquisitions.
“For years, 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,” said Mr. Furner in a statement.
“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,” said Ribbitt’s Malka.
Walmart is not a newbie to financial services. The retailer has partnered with third parties to offer services, oftentimes geared to the unbanked, including check cashing, installment financing, money transfers and Walmart-branded credit and prepaid debit cards. Walmart had explored making industrial bank acquisitions in the past, but has been rebuffed by state and federal legislators concerned about its impact on the marketplace.
DISCUSSION QUESTIONS: Do you expect Walmart’s new venture with Ribbit Capital to turn the retailer into a driving force in the fintech sector? What do you think this may mean for Walmart’s associates, customers and its retail rivals?