Walmart recently announced the launch of a new fintech startup “designed to develop and offer modern, innovative and affordable financial solutions,” according to a press release about the new service. Ribbit Capital will be partnering with Walmart for the venture, but it will be majority owned by Walmart. The fintech venture isn't Walmart’s first foray into businesses outside their extremely successful retail and ecommerce business; in October, the retailer launched Walmart Insurance Services.
What Is The New Fintech Startup Offered By Walmart?
At this point, details about the Walmart fintech startup are scant. It’s unclear when the Ribbit venture will fully launch and what specific financial services will be offered. However, Walmart indicates that the “tech-driven financial experiences” of the Walmart fintech service will be “tailored to Walmart’s customers and associates,” who have expressed an interest in more financial services from Walmart. Walmart’s existing financial services and partnerships, including a Walmart credit card, Walmart money card, check cashing, money transfers and installment financing, will all continue to be offered to Walmart shoppers. How these existing services will integrate into the new Walmart fintech offering hasn’t been announced, although future “growth [of the Walmart fintech service] may come through partnerships and acquisitions with leading fintech companies.”
Why Is Walmart Introducing A Fintech Service?
Walmart has incredible loyalty from consumers, who turn to the retailer for lifestyle needs across a large and growing spectrum of goods and services offered at affordable price points. The introduction of the new Walmart fintech service keeps existing shoppers in the Walmart hemisphere, attracts new consumers who may be looking for a more accessible financial experience and grows revenue opportunities for the retailer. “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 John Furner, President and CEO, Walmart U.S. “We’re thrilled to work with Ribbit Capital in a new venture to help us deliver innovative and needed options to our customers and associates — with speed and at scale.”
Walmart’s continued foray into digital assets and services is representative of consumer shopping behaviors, which have transitioned to digital at an increasing rate recently. “Financial services represent yet another [digital] monetization opportunity that could be meaningful in supporting long-term profitability for Walmart as third parties increasingly pay for access to its growing online traffic,” said Bank of America’s Robert Ohmes, in praise of the deal. Adding that Walmart’s growing digital advertising business is well-served by Walmart’s “continued expansion [of] its digital ecosystem.”
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