The cars pass a Walmart store in Washington, DC, on August 18, 2020.
Nicholas Kamm | AFP | Getty Images
Walmart said on Monday that it is creating a fintech start-up with Ribbit Capital, one of the venture capital firms behind Robinhood.
The large retailer did not reveal the name of the new company or say when its services would be available. She said she will develop exclusive and affordable financial products for Walmart employees and customers.
The shares rose more than 2% with news from Monday’s trading session. Walmart’s market capitalization is $ 416.7 billion.
The fintech startup will be majority owned by Walmart and its board will include several company executives, including chief financial officer Brett Biggs and Walmart US CEO John Furner. He said he would also appoint independent industry experts to the board and could acquire or partner with other fintech companies.
“For years, millions of customers have placed their trust in Walmart not only to save money when they shop with us, but also to help them manage their financial needs,” said Furner in a press release. “And they made it clear that they want more of us in the area of financial services.”
With more than 4,700 stores across the country, Walmart interacts with millions of customers each year – including some who have no relationship with a bank or financial advisor.
Six percent of adults have no checking, savings or money market accounts, according to the Federal Reserve. About 16% have a “lack of bank”, which means they have a bank account, but also use alternative financial services products, such as money orders. These Americans are more likely to resort to short-term solutions, such as a pawn shop or a payroll loan, which can result in additional charges or high interest rates.
Walmart already offers some financial services to customers. For example, he has the Walmart MoneyCard, a prepaid debit card that customers can charge with cash and use to make purchases. The card has some features that encourage money management or help people who may have a challenging credit history, such as no overdraft fees, no monthly fees and no minimum balance requirements.
The retailer also offers alternative payment plans for customers on a tight budget, such as layaway and Affirm, a fintech company that allows customers to buy an item online immediately and pay in installments.
Walmart’s co-owner of the new company, Ribbit Capital, has a history of investing in fintech companies. Its portfolio includes Affirm; Robinhood, a tax-free investment start-up; and Credit Karma, a company that offers consumer-friendly tools, such as free credit score checks.