Former Walmart CEO Bill Simon argues that the coronavirus pandemic will challenge department stores, but the one-stop shops will perform well.
Walmart is partnering with Ribbit Capital, a venture capital firm behind the no-fee investment platform Robinhood, on a new fintech venture designed to develop ‘modern, innovative and affordable financial solutions’ and to retailer employees and to offer customers.
‘Millions of customers have relied on Walmart for years to not only save money when they shop with us, but also help them manage their financial needs. And they have made it clear that they want more of us in the financial services sector, ‘John Furner, President and CEO of Walmart, said in a statement on Monday. “We are delighted to be working with Ribbit Capital on a new venture to help us offer innovative and needed options to our customers and associates – quickly and on a large scale.”
Walmart did not share the name of the new company or say when its services will be available.
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The startup will be majority owned by Walmart, with Furner and Walmart’s executive vice president and chief financial officer Brett Biggs running the company, along with Ribbit Capital’s managing partner Meyer Malka.
“Walmart has a relationship with millions of customers and employees that is built on trust, security and integrity,” Malka said. “When we combine our in-depth knowledge of technology-driven financial ventures and our ability to move quickly with Walmart’s mission and reach, we can create and deliver unparalleled financial offerings.”
The startup will also add independent industry experts and build a management team of experienced fintech leaders, with growth expected through partnerships and acquisitions with leading fintech companies.
In addition to Robinhood, Ribbit Capital’s portfolio includes Credit Karma, a consumer technology platform that offers customers free credit value checks, and Affirm, a fintech company that enables customers to pay installments after purchasing them online.
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Walmart serves more than 265 million customers and members weekly in its 11,500 stores in 27 countries and its e-commerce sites and has more than 2.2 million employees worldwide.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| WMT | WALMART INC. | 147.29 | +0.66 | + 0.45% |
The company noted that it will offer its other financial services and partnerships with third parties, including Walmart credit card, Walmart cash card, check cashing, money transfers, installment financing and more.
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According to the Federal Reserve, about 6% of adults in 2019 were unbanked or did not have a check, savings or money market account. Half of adults who did not bank used some form of alternative financial service in 2019 – such as check-in exchange service, pawn shop loan, car title loan, payday loan, salary advance, or tax repayment advance. Meanwhile, after about 16% of adults are called ‘subbank’, where they have a bank account but also use an alternative financial service product.
Unbanked and underbanked were more likely to have low incomes, train less or be in a racial or ethnic minority group. Fourteen percent of those with an income of less than $ 40,000 were not banked, compared to 1% of those with an income above the threshold. In addition, 14% of black adults and 10% of Spanish adults were not banked, compared to 6% of adults in general.
The remaining 79% are considered ‘full bank’, where they had a bank account and did not use any alternative financial products.