Walmart (WMT) announced that it would join forces with Ribbit Capital to provide next-generation financial products that offer state-of-the-art technology and fair prices. Although the amount of investment and the future name of the fintech company have yet to be disclosed, Walmart is expected to own a majority stake.
A press release indicates that Walmart USA will be represented on the Board of Directors by John Furner, President, and Chief Executive Officer and Brett Biggs, Executive Vice President and Chief Financial Officer and Meyer Malka, Managing Partner of Ribbit Capital.
In light of the rapid growth and strong position of fintech companies and their decline in the banking sector, the largest US retailer has decided to create a new financial services business. Some of Walmart’s financial products and services are already available to customers, Walmart credit and money cards, installment payments, check cashing, money transfers, etc. Its current offerings and partnerships will continue, according to the company.
As a leading player in the US fintech market, Ribbit Capital appears to be the right partner for this partnership. The company was one of the key investors of such firms as credit company Affirm, Robinhood, and Credit Karma, a company providing free financial instruments and tools to consumers.
Additionally, Walmart (WMT) can benefit from its vast customer base as more than 265 million customers visit Walmart every week at 11,500 stores in 27 countries and online. Over 90% of the population lives within 16 kilometers radius of a Walmart store in the United States, with 4,700 Walmart stores. Walmart’s e-sales is also showing an increasing trend in customer demand.
A new Walmart (WMT) joint venture, with the right partner, could become a significant player in the financial technology industry. However, Walmart made it clear that it was open to the idea of expansion, stating that it might consider acquiring companies and entering into new partnerships.