The cars pass in front of a Walmart store in Washington, DC, on August 18, 2020.
Nicholas Kamm | AFP | Getty Images
Walmart said Monday it is creating a fintech start-up with Ribbit Capital, one of the venture capital firms behind Robinhood.
The retailer did not share the name of the new company or say when its services will be available. He said he will develop unique and affordable financial products for Walmart employees and customers.
Shares rose more than 2% from trading news after Monday’s schedule. Walmart’s market cap is $ 416.7 billion.
The fintech startup will be majority owned by Walmart and its board will include several executives of the company, including its chief financial officer, Brett Biggs, and Walmart’s US CEO John Furner. He said he will also appoint independent industry experts to the board and will be able to acquire or partner with other fintech technology companies.
“For years, millions of customers have trusted Walmart to not only save them money when they shop with us, but to help them manage their financial needs,” Furner said in a press release. “And they’ve made it clear that they want more of us in the realm of financial services.”
With more than 4,700 stores nationwide, Walmart interacts with millions of customers each year, including some who have no relationship with a bank or financial advisor.
According to the Federal Reserve, six percent of adults do not have a checking account, savings or money market. About 16% are “poorly banked,” meaning they have a bank account, but they also use alternative financial services products, such as a money order. Americans are more likely to resort to short-term solutions, such as a pawnshop or a payday loan, which can lead to additional charges or high interest fees.
Walmart already offers some financial services for customers. For example, you have Walmart MoneyCard, a prepaid debit card that customers can charge with money and use for purchases. The card has some features that help you manage money or help people who may have a disputed credit history, such as no overdraft fees, no monthly fees, and no minimum balance.
The retailer also offers alternative payment plans for low-budget customers, such as Layaway and Klarna, an online financial services option that allows shoppers to buy an item immediately and pay in installments.
Walmart’s co-owner of the new company, Ribbit Capital, has a history of investing in fintech technology companies. His portfolio includes Robinhood, a commission-free investment firm; Credit Karma, a company that offers consumer-friendly tools, such as free credit score checks; and Affirm, a financial lender that offers customers alternative payment options, such as buy and pay later.