Walmart has announced a partnership that will create 200 new jobs as it expands its financial products for its customers.
The retail giant has been merging with several financial technology firms, known as fintech, to create a “neobank” to allow customers to manage money with lower fees.
In January 2020, Walmart acquired Ribbit Capital to develop and offer reasonable financial solutions.
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Ribbit’s investment portfolio comprises Credit Karma, Affirm, and Robinhood.
Walmart hired two Goldman Sachs execs to head up the new fintech venture, which is called Hazel.
Last month, Walmart acquired the financial startup Even Responsible and One, a digital banking alternative founded in 2019 by Brian Hamilton.
All of the startups will operate under the brand ONE, with Omer Ismail as CEO, pending regulatory permission.
The combined business will employ more than 200 employees and have more than $250 million in cash on hand to fund future growth.
He said: “Consumers everywhere are being left behind by the world of financial services,” Our vision is clear: build on Even and One’s success to offer a product that gives consumers the best way to spend, the best way to access their wages and helps millions save and grow their money.”
Walmart US CEO John Furner told analysts the fintech moves help consumers get paid early, spend, save, borrow and grow their money as ONE seeks to develop an app once the deals close in the first half of this year.
The retailer said that the ONE app would be integrated inside Walmart’s physical and digital channels, offering options to its 1.6 million US employees and 100 million-plus weekly shoppers.
As a standalone company and app, Walmart said that one would be available directly to US consumers and through partnerships with other leading employers and merchants.
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ONE will collaborate with Coastal Community Bank to provide saving, spending, and borrowing services through a single digital account.
Walmart’s investments in fintech also stem from knowing millions of Americans can’t access credit. Almost 25% of US adults are unbanked or underbanked, and roughly 80 percent of fintech users rely on multiple accounts to manage their finances.
Furner said: “Walmart is constantly looking for new ways to deliver on our core mission of helping our customers save money and live better.
“Customers have made it clear that they want more from us in the financial services arena.”
He added: “Creating a simple, personalized app that allows users to manage their money in one place is the natural next step toward fulfilling that.
“We couldn’t be more excited about what this will mean for Walmart customers, associates, and consumers everywhere as we try to help empower millions to improve their financial lives.”
Ben Jackson, chief operating officer at Innovative Payment Solutions, said retailers have long understood the necessity to offer financial services to their customer base.
He said it’s a prospect for Walmart to become top of mind with their customers regarding financial services, and it’s another way to draw them into the retail giant’s ecosystem.
Walmart has the potential to incorporate financial services into its mobile app, which currently allows customers to get medication refills, schedule vaccinations, return products, order a custom cake, and browse for a new or used car.
He said the 4,300 store locations are also a significant advantage because of the proximity to 90 percent of the US population.
Source: Talk Business & Politics
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