Walmart to create fintech startup with Ribbit Capital

Walmart to create fintech startup with Ribbit Capital

Kate Rooney joins ‘Closing Bell’ to report Walmart has announced it will create a fintech startup called Ribbit Capital. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Walmart said Monday that it’s creating a fintech start-up with Ribbit Capital, one of the venture capital firms behind Robinhood.

The big-box retailer did not share the name of the new company or say when its services will be available. It said it will develop unique and affordable financial products for Walmart employees and customers.

Shares were up more than 2% on the news in after-hours trading Monday. Walmart’s market cap is $416.7 billion.

The fintech startup will be majority-owned by Walmart and its board will include several company executives, including its Chief Financial Officer Brett Biggs and Walmart U.S. CEO John Furner. It said it will also name independent industry experts to the board and may acquire or partner with other fintech companies.

“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,” Furner said in a news release. “And they’ve made it clear they want more from us in the financial services arena.”

With more than 4,700 stores across the country, Walmart interacts with millions of customers each year – including some who don’t have a relationship with a bank or a financial advisor.

Six percent of adults don’t have a checking, savings or money market account, according to the Federal Reserve. About 16% are “underbanked,” meaning they have a bank account but also use alternative financial service products, like a money order. Those Americans are more likely to turn to short-term solutions, such as a pawn shop or a payday loan, which can lead to additional charges or high interest fees.

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

The retailer also offers alternative payment plans for customers on a tight budget, such as layaway and Affirm, a fintech company that allows customers to buy an online item immediately and pay in installments.

Walmart’s co-owner of the new company, Ribbit Capital, has a history of investing in fintech companies. Its portfolio includes Affirm; Robinhood, a fee-free investing start-up; and Credit Karma, a company that offers consumer-friendly tools like free credit score checks.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-credit-cards/

#CNBC
#CNBCTV

More News Stories

Loading...

More Political News

Loading...