Walmart to launch fintech startup with partner Ribbit Capital

January 12, 2021 Digital, NEO, Open Banking, Open Finance, Enterprise, FinTech and Alternative Finance, Fintech International, Fintech Services, Innovation and Resources, Stories No comments

Bankingdive | Anna Hrushka | Jan 11, 2021

Summary:

Walmart is creating a fintech startup in partnership with venture capital firm Ribbit Capital, the big-box retailer announced Monday.
The new venture will "develop and offer modern, innovative and affordable financial solutions" to customers and employees, Walmart said.
"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," John Furner, president and CEO of Walmart U.S. said in a statement.

The details of Walmart's new fintech startup are scarce. The Bentonville, Arkansas-based company did not disclose the name of the new entity, specific services or a launch date.

The retailer said the strategic partnership "will bring together Walmart's retail knowledge and scale with Ribbit's fintech expertise to deliver tech-driven financial experiences tailored to Walmart's customers and associates."

The startup will be majority-owned by Walmart and its board will include Furner, Walmart Executive Vice President and CFO Brett Biggs and Meyer Malka, managing partner of Palo Alto, California-based Ribbit Capital.

See: Amazon, Walmart, the Secret Battle for FinTech Supremacy: Part II

Walmart said its plans to add independent industry experts to the fintech's board and build a management team of experienced fintech leaders. The company also plans to grow the startup through partnerships and acquisitions with fintech companies.

"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," Malka said in a statement.

Walmart's intention to expand into fintech is not the first time the retail giant has made moves into the financial services space.

In partnership with Green Dot, the company already operates a prepaid debit card called Money Card, which customers can load with funds and use to make purchases.

Walmart said it will continue to serve customers through its existing financial services products, including Money Card, check cashing, money transfers, installment financing and its Walmart credit card.

Andrew Cosgrove, the former general counsel and chief compliance officer at LendingUSA, said he thinks Walmart's new fintech plans could mean the retail giant is looking to bring its financial services infrastructure in-house.

See: How is Amazon disrupting the financial services sector?

"Green Dot owns all of the interface, the technology and the whole infrastructure," he said, regarding Money Card. "I think they feel like it would be more useful for them to build their own infrastructure, which is what most fintechs are doing."

Ribbit Capital's past investments in top-tier fintechs such as Affirm, Credit Karma and Robinhood also signal the retailer is setting itself up for a successful venture, said Cosgrove, whose former company, the challenger bank Upgrade, is also a Ribbit portfolio company.

"Ribbit Capital is a top-tier fintech investment venture capitalist," he said. "Malka is really well-versed in all areas of fintech. I believe that they're going to be well positioned to create a winning product, whatever the product might be."

Walmart's brick-and-mortar presence could also help the retailer win over the unbanked and underbanked, a demographic that has historically had trouble trusting financial institutions, including online-only fintechs, Cosgrove said.

"The fact that Walmart has bricks-and-mortar locations in many communities will go a long way in building that trust," he said.

Continue to the full article --> here

NCFA Jan 2018 resize - Walmart to launch fintech startup with partner Ribbit Capital The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org