Former Walmart CEO Bill Simon argues that the coronavirus pandemic will challenge department stores, but one-stop shopping outlets will perform well.
Walmart is teaming up with Ribbit Capital, a venture capital firm behind the no-fee investment platform Robinhood, on a new fintech startup designed to develop and offer "modern, innovative and affordable financial solutions" to the retailer's employees and customers.
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“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,” Walmart U.S. president and CEO John Furner said in a statement Monday. “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 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 on the company's board along with Ribbit Capital's managing partner, Meyer Malka.
“Walmart has a relationship with millions of customers and associates built on trust, security and integrity,” Malka said. “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.”
The startup will also add independent industry experts to its board and to build a management team of experienced fintech leaders, with growth expected through partnerships and acquistions with leading fintech companies.
In addition to Robinhood, Ribbit Capital's portfolio includes Credit Karma, a consumer technology platform that offers customers free credit score checks, and Affirm, a fintech company that allows customers to pay for an item in installments after purchasing it online.
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Walmart serves over 265 million customers and members each week across its 11,500 stores in 27 countries and its e-commerce websites and employs over 2.2 million associates worldwide.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 147.29 | +0.66 | +0.45% |
The company noted it will continue to offer its other existing financial services and partnerships with third parties, including Walmart credit card, Walmart Money card, check cashing, money transfers, installment financing and more.
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According to the Federal Reserve, about 6% of adults were unbanked, or did not have a checking, savings, or money market account in 2019. Half of unbanked adults used some form of alternative financial service during 2019—such as a money order, check-cashing service, pawn shop loan, auto title loan, payday loan, paycheck advance, or tax refund advance. Meanwhile, about 16% of adults were referred to as "underbanked", where they had a bank account but also used an alternative financial service product.
The unbanked and underbanked were more likely to have low income, have less education, or be in a racial or ethnic minority group. Fourteen percent of those with incomes below $40,000 were unbanked, versus 1% of those with incomes over that threshold. Additionally, 14% of Black adults and 10% of Hispanic adults were unbanked, versus 6% of adults overall.
The remaining 79% were considered "fully banked", where they had a bank account and no use of alternative financial products.
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January 12, 2021 at 05:57AM
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Walmart teams up with investment firm behind Robinhood on new fintech startup - Fox Business
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