Walmart has thrown its hat into the fintech – technology-focused financial services – ring with a startup in a partnership with Ribbit Capital. The Bentonville-based retail giant said Monday (Jan. 11) the startup will develop and offer new and affordable financial solutions for customers.
“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, Walmart U.S. president and CEO. “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.”
The company will be majority-owned by Walmart and its board will include Furner; Brett Biggs, executive vice president and chief financial officer, Walmart; and Meyer Malka, managing partner of Ribbit Capital. The company plans to add independent industry experts to the board and to build a management team of experienced fintech leaders. It anticipates that growth may come through partnerships and acquisitions with leading fintech companies.
Ribbit Capital was founded in 2012 and its portfolio includes Credit Karma, the no-fee mobile investment platform Robinhood, and the longer-term payment platform Affirm. Walmart already has a relationship with Affirm and offers the financing option on large purchases at its stores on Walmart.com.
“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.”
Walmart said it will continue to interact with customers through its existing financial services and partnerships with third parties, including Walmart Credit Card, Walmart Money Card, check cashing, money transfers, installment financing and more. Walmart already works with PayActiv, a San Jose, Calif.-based fintech that began offering the early-pay option to Walmart employees in early 2020.
Scott Benedict, director of retail studies at Texas A&M University, said the partnership is a smart move by Walmart. He said the retailer has dabbled in the space with various partners for years but the latest move puts the company squarely in the game to help find innovations that it can apply to its consumer business as well as enhance relationships with smaller online suppliers who could benefit from various financing options.
“Walmart can benefit from this move into more services and it will be interesting to see the applications that come out of the new startup. I expect the focus will include services for customers and suppliers,” Benedict said.
Walmart shares (NYSE: WMT) closed Monday at $147.29, up 66 cents. During the past 52 weeks, Walmart shares have traded between $102 and $153.66.