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Former Walmart CEO Bill Simon says the coronavirus pandemic will challenge department stores, but one-stop shops will work well.
Walmart partners with Ribbit Capital, a venture capital firm behind the no-cost investment platform Robinhood, on a new fintech startup designed to develop and deliver ‘modern, innovative and affordable financial solutions’ to employees and customers of the retailer.
“For years, millions of customers have trusted Walmart not only to save them money when they shop with us, but also to help them manage their financial needs. And they made it clear that they wanted more from us in the financial services business, ”Walmart US President and CEO John Furner said Monday. “We are excited to be working with Ribbit Capital in a new venture to help us deliver innovative and needed options to our clients and associates – quickly and at scale.”
Walmart has not shared the name of the new company or indicated when its services will be available.
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The startup will be majority owned by Walmart, with Furner and Walmart executive vice president and chief financial officer Brett Biggs on the company’s board of directors, as well as Ribbit Capital’s managing partner Meyer Malka.
“Walmart has a relationship with millions of customers and associates built on trust, security and integrity,” said Malka. “When we combine our in-depth knowledge of technology-driven financial companies and our ability to scale quickly with Walmart’s mission and reach, we can create and deliver financial offerings that are second to none.”
The start-up will also add independent industry experts to its board of directors and build a management team of experienced fintech leaders, with expected growth through partnerships and acquisitions with leading fintech companies. .
In addition to Robinhood, Ribbit Capital’s portfolio includes Credit Karma, a consumer technology platform that gives clients free credit score checks, and Affirm, a financial technology company that allows clients to pay a item in installments after purchasing it online.
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Walmart serves more than 265 million customers and members weekly at its 11,500 stores in 27 countries and e-commerce websites, and employs more than 2.2 million associates worldwide.
| Teleprinter | security | Latest | Change | Change% |
|---|---|---|---|---|
| WMT | WALMART INC. | 147.29 | +0.66 | + 0.45% |
The company said it would continue to offer its other existing financial services and third-party partnerships, including Walmart Credit Card, Walmart Money Card, Check Cashing, Money Transfers, Funding installments 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 in 2019 – such as money order, check cashing service, pawnshop loan, auto title loan, payday loan, paycheck advance or tax refund advance. Meanwhile, around 16% of adults were described as “underbanked,” where they had a bank account but also used another financial services product.
Unbanked and underbanked people were more likely to have low income, have less education, or belong to a racial or ethnic minority. Fourteen percent of those with incomes below $ 40,000 were unbanked, compared with 1% of those with incomes above that threshold. Additionally, 14% of black adults and 10% of Hispanic adults were unbanked, compared with 6% of all adults.
The remaining 79% were considered “fully banked,” where they had a bank account and did not use alternative financial products.
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