Economy

Walmart creates a fintech startup with an investment firm behind Robinhood

Walmart creates a fintech startup with an investment firm behind Robinhood

Cars pass through the Walmart store in Washington, DC, on August 18, 2020.

Nicholas Cam | Agence France-Presse | Getty Images

Walmart said Monday it is setting up a fintech startup with Ribbit Capital, one of the venture capital firms behind Robinhood.

The major retailer did not name the new company or say when its services would be available. She will develop unique and affordable financial products for Walmart employees and customers.

Shares rose more than 2% on the back of the news in the trading session after Monday. Walmart has a market cap of $ 416.7 billion.

The fintech startup will be majority-owned by Walmart and its board will include several company executives, including the company’s chief financial officer Brett Biggs and Walmart CEO John Forner. It said it would also appoint independent industry experts to the board of directors and might acquire or partner with other fintech companies.

“For years, millions of customers have trusted Walmart to not only provide them money when they shop with us but to help them manage their financial needs,” Forner said in a press release. “And they made it clear that they want more from us in financial services.”

With more than 4,700 stores across the country, Walmart interacts with millions of customers every year – including some who have no relationship with a bank or financial advisor.

Six percent of adults do not have a checking, savings, or money market account, according to the Federal Reserve. About 16% are underbanked, which means they have a bank account but also use alternative financial service products, such as money orders. These Americans are more likely to turn to short-term solutions, such as a pawn shop or a payday loan, which may result in additional fees or high interest charges.

READ  Investors believe there is a higher chance that both Tesla and Bitcoin will be halved, Deutsche Bank warns

Walmart is already providing some financial services to clients. For example, Walmart has MoneyCard, which is a prepaid debit card that customers can load with money and use for purchases. The card contains some features that encourage money management or help people who may have a complex credit history, such as no overdraft fees, monthly fees, or a minimum balance requirement.

The retailer also offers alternative payment plans for clients on a budget, such as Layaway and Affirm, a financial technology company that allows customers to buy an item online instantly and pay in installments.

Walmart’s partner for the new company, Ribbit Capital, has a history of investing in fintech companies. Her Affirm portfolio includes; Robinhood, a no-fee investment startup; And Credit Karma, a company that provides consumer-friendly tools like free credit score checks.

Добавить комментарий

Ваш адрес email не будет опубликован. Обязательные поля помечены *