Bloomberg reports that Walmart this month plans to announce a new fintech venture that will make digital bank accounts available to some of its employees and customers. first as a beta test and later, if things work out, as a broader offering.
According to the story, "The move heralds the arrival of Walmart’s fintech push after years of fitful efforts to expand its financial-services offerings. Eventually, One -- the financial-technology startup Walmart is leaning on for the effort -- is hoping to offer a bevy of other products, from loans to investing, in an effort to become a one-stop shop for consumers’ financial needs, the people said. Watching closely will be lawmakers, regulators and Wall Street titans."
Bloomberg writes that "Walmart’s interest in financial services is nothing new. The company’s MoneyCenter locations already allow customers to cash checks, access tax-preparation services and send money overseas through partners such as MoneyGram International Inc. and Euronet Worldwide Inc.’s Ria. The retail giant also already offers a bevy of credit and prepaid debit cards through lenders including Capital One Financial Corp., Synchrony Financial and Green Dot Corp.
'But the company hasn’t been shy about setting more ambitious goals."
“We’ve got a pretty big financial services business, but I would characterize it as being analog, and the opportunity to make it digital is right there in front of us,” Walmart Chief Executive Officer Doug McMillon said last year at an investor conference. “There are so many digital products that we can go build that will help people with managing their family’s expenses and their accounts and ultimately, hopefully, build wealth.”
- KC's View:
Expect lawsuits. Expect legislative inquiries. Expect regulatory probes. The financial services industry - which always has hated the idea of having to compete with Walmart - has a lot of lobbying money and isn't afraid to use it.
I get why Walmart having this kind of power could be an issue, but I also kind of like the idea of Walmart challenging the the orthodoxies of the banking business in a way that is good for consumers.