- Walmart faces an uphill climb in distinguishing any further finserv products it launches.
- But its stores and existing lineup will give it ample opportunities to expose its offerings to prospective customers.
- Insider Intelligence publishes hundreds of research reports, charts, and forecasts on the Banking industry with the Banking Briefing. You can learn more about subscribing here.
The retail giant is working with investment firm Ribbit Capital—which has previously backed popular fintech startups such as Robinhood, Affirm, and Credit Karma—to create a fintech startup with the goal of expanding its affordable financial services offerings for employees and customers, The Wall Street Journal reports.
Insider Intelligence
The retailer did not reveal a launch date or product details, though it said future growth for the fintech startup may come from partnerships with and acquisitions of leading fintech companies, per the Journal.
Walmart has dabbled in financial services offerings in the past, which are geared toward making financial products more accessible:
- Small- and medium-sized business (SMB) lending in partnership with Goldman Sachs’ digital bank, Marcus. Through this collaboration, SMBs that sell on Walmart’s Marketplace platform can apply for credit lines of $10,000–$75,000 at a fixed annual interest rate between 6.99% and 20.99%. The partners aim to eventually offer credit lines of up to $1 million.
- A reloadable debit card and fintech accelerator program in collaboration with Green Dot. Walmart and Green Dot have worked together on the MoneyCard program since 2006 and recently announced a slew of new features and benefits for it, including a 2% APY on funds saved in the Walmart savings account available through the MoneyCard App, free cash deposits, and the ability to add money to their card from existing bank accounts. The retail giant also launched a fintech accelerator with Green Dot in October 2019, with a goal to “develop innovative products, services and technologies that sit at the intersection of retail shopping and consumer financial services.”
While Walmart will face the universal digital bank challenge of distinguishing itself from competitors, it may have an easier time getting its marketing in front of a wide range of prospective customers. The US fintech environment is crowding, with alternative lenders like SoFi and neobanks like Chime and Varo taking up much of the oxygen.
While Walmart will have its work cut out in finding a competitive edge on these fintechs in terms of its actual offerings, one area where it will have a built-in advantage will be in marketing. Its 4,748 Walmart stores and 599 Sam’s Club stores in the US give it ample space in which to display advertisements for any fintech products it launches to a wide audience. Additionally, it can try cross-selling fintech innovations to users of MoneyCard to further drive exposure.
Want to read more stories like this one? Here’s how you can gain access:
- Join other Insider Intelligence clients who receive this Briefing, along with other Banking forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
- Explore related topics more in depth. >> Browse Our Coverage
Current subscribers can access the entire Insider Intelligence content archive here.