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Walmart Embraces FinTech on the Path to Embedded Finance

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October 13, 2021
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October 13, 2021
Walmart Embraces FinTech on the Path to Embedded Finance

A variety of technological advances that enhance services & sectors and improve customer satisfaction surface each year. The year 2020 was a defining year in terms of tech and connectivity, with social distancing norms pushing companies and organizations across sectors to go online and cater to customers in a more personalized and digital manner. An immense technological disruption impacted all aspects of our lives—from education to work to entertainment. All our ‘public’ activities were moved to the digital sphere. Group experiences took a backseat even as online media such as Zoom and Skype made us indulge in digital socializing and team building.

Some of the early adopters of the technology were customer-oriented sectors such as retail and travel. With past practices becoming irrelevant, given the expanding millennial customer base, both sectors jumped on the technology bandwagon and started offering tailor-made services catering to individual preferences and requirements. For instance, companies such as Flipkart, MakeMyTrip, and redBus reached out to customers directly through their ubiquitous apps, offering all types of services at the convenience of a single click. Over time, financial service providers also made their way to the online space, with FinTech companies enabling superfast speed, huge transaction volumes, and seamless accuracy. With the tremendous potential for growth and scope-defying imagination, FinTech is now acting as a catalyst for other industries and helping them enhance sales and profitability while optimally managing customer expectations.

Walmart’s Association with FinTech

Walmart, one of the largest US retailers, is a giant with a global value chain; it offers everything from books to toiletries to electronics. The entity evolved from founder Sam Walton’s endeavor to offer customers great value and excellent services. A visionary company on several accounts, Walmart emphasizes innovation and technology adoption. Walton introduced new approaches and technologies to augment the retail experience, ensuring customers were never left dissatisfied.

We see a visionary approach in Walton's words—"If we work together, we'll lower the cost of living for everyone...we'll give the world an opportunity to see what it's like to save and have a better life." Walmart has steadily expanded its technological approach to retail and financing in keeping with this vision. The company now offers customers accessible FinTech products such as credit cards, check-cashing services, money transfers, and installment financing. Indeed, financing is the other side of retail, and Walmart cracked this formula before its competitors. During the pandemic, the largest global retailer has further cemented its leadership in cross-border, cross-currency money movement and payments by enabling Western Union money transfer services, including domestic and international money transfers, bill payments, and money orders, at Walmart locations across the US. The move ensures more choices and more excellent value for millions of Walmart customers.

Leveraging FinTech for a Future-Ready Model 

Over the past 20 years, Walmart has endeavored to provide customers access to financial services from their preferred providers, enabling it to expand its offerings beyond the core segment and capitalize on the spending prowess of its large customer base. According to Wilbert Noronha, Vice President of Financial Services at Walmart, "Walmart is much more than a place where customers shop. To millions, it’s also a place they trust for their financial needs as well.” In a press release issued this month, Walmart stated that it had saved customers more than $1.5 billion across its marketplace financial services offerings since 2014.

In line with its visionary outlook, Walmart recently announced the creation of a new FinTech startup to develop and offer modern, innovative, and affordable financial solutions, in association with leading FinTech investment firm Ribbit Capital. With this venture, Walmart plans to combine its retail knowledge and scale with Ribbit Capital’s FinTech expertise to offer personalized and tech-driven financial experiences to match the requirements of its customers and associates.

The retailer also has a finger in the financial technology pie of the countries in which it functions. For instance, it is the owner of India-based e-commerce company Flipkart, which owns the digital wallet PhonePe. The parent company reaped rich dividends from this investment, with PhonePe earning $58 million in the financial year 2020, up from $33 million in the previous year. Moreover, in October 2020, PhonePe surpassed Google Pay to become the top UPI payments app in the country—a position it has held ever since. Last month, it secured $700 million in a new financing round at a post-money valuation of $5.5 billion. Along with payments (P2P and P2M), it offers services such as utility bill payments, mobile top-up recharge, and credit card payments, as well as products such as insurance, digital gold, and liquid funds.

Walmart is no longer just the largest global retailer; it is a behemoth with stakes in upcoming FinTech segments such as digital wallets, money transfer services, and startups. The entity has realized the value inherent in the FinTech space and capitalized on the demand for price-sensitive and seamless financial services. With customers willing to shell out a great deal of money for personalized offerings, Walmart is now embracing the future-ready model with its arsenal of FinTech services in tow.


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