Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology. Let us all WIN!
Walmart is set to venture into the financial system through a new fintech startup to offer its customers and employees a reliable service.
Walmart Inc (NYSE: WMT) has poached two top Goldman Sachs Group Inc (NYSE: GS) bankers to lead its new fintech startup with Ribbit Capital. The American multinational retail corporation is seeking to diversify its investment portfolio to bolster its deteriorating stock market.
Notably, Walmart stocks have been dropping in the past three months. Whereby according to MarketWatch, they have dropped approximately 15%, 6.7%, and 9.8% in the past three months, one month, and year-to-date.
Apparently, Walmart remains more susceptible to the coronavirus crisis than other e-commerce companies. Notably, the company significantly relies on low-income earners for its sales, and most are struggling to make the ends meet, especially without the stimulus package.
Walmart Focus on Fintech Startup
Walmart is set to venture into the financial system through a new fintech startup to offer its customers and employees a reliable service. Furthermore, with over 12.6 million Americans having reported unemployment status, Walmart expects a deeper crisis in the near future. Customers have “made it clear they want more from us in the financial services arena,” president and CEO of Walmart US John Furner said in a statement.
Moreover, Walmart has a huge database of customers’ information that could benefit its financial market venture. “Walmart’s newly-announced fintech joint venture with Ribbit Capital will provide myriad growth opportunities, with the leveraging of its massive customer base at the center of the initiative,” Moody’s Vice-President and Senior Credit Officer Charlie O’Shea, said in a note to investors. “Walmart has been slowly and tactically expanding its financial service offerings to its customers, and measured expansion of these capabilities makes sense as it will deepen these all-important customer relationships.”
Goldman Sachs will now be deprived of Omer Ismail, the head of Goldman’s consumer bank, crucial services. Besides, David Stark, one of Ismail’s top lieutenants at Goldman, will be joining the unnamed Walmart fintech startup. “Our business has serious momentum and a deep and growing bench of talent,” said Andrew Williams, a Goldman Sachs spokesman. “We wish these two well.”
Walmart’s entry into the financial and banking sector is a threat to traditional and leading firms in the sector. Notably, in addition to the huge market capitalization, the e-commerce giant has a significant number of customers’ databases. Besides, Ribbit is set to bring on board notable expertise to develop the fintech startup. As a result, it is capable of developing a major financial ecosystem in partnership with other industry players that shakes the traditional banking system.
At the tail end of last year, the Federal Deposit Insurance Corp. approved a final rule governing so-called industrial loan companies. As a result, it is now easier for major businesses to seek banking charters while escaping capital and liquidity demands faced by dedicated financial firms.