Walmart Has Over 200 Million Visits to Its Stores Weekly. Why Not Become a Fintech? - Barron's

Illustration by Elias Stein

A raft of start-ups, from Robinhood to Affirm, have shaken up fintech. And the same software that allows upstarts to take market share from banks opens the way for giants like Walmart to make a run at the business, too.

In January, the big retailer said it was teaming up with Ribbit Capital, a venture firm that has funded Robinhood, Affirm, and Credit Karma, among others, on a new fintech. Details were scarce. Walmart, which already offers credit and prepaid debit cards, check cashing, money transfers, and installment loans, said it was responding to customer demand. Walmart doesn’t offer bank accounts that give customers, say, cash back on purchases.

Recently, Walmart hired Omer Ismail, the architect of Goldman Sachs’ Marcus consumer banking business, and his colleague David Stark, to lead the fintech start-up. Marcus draws retail customers by offering higher interest rates on deposits than most other banks; it generated $1.2 billion in 2020 revenue and gathered $97 billion in deposits.

Barriers, meanwhile, have fallen. An FDIC rule that goes into effect next month eases some requirements for companies seeking deposit insurance. Key back-office software from companies like Apex Clearing has become ubiquitous. And new strategies have emerged. Square offers cryptocurrency buying and selling on its Cash app, originally meant as a money-transfer service, and began earning fees from many of its 30 million users. In the past quarter, Cash generated $41 million in gross profit from Bitcoin.

Besides, it doesn’t take much for Walmart to achieve scale. How many banks average more than 200 million visits a week?

Next Week

Monday 3/8

Casey’s General Stores and Stitch Fix report quarterly results.

Cigna holds a virtual investor day. Management will discuss emerging trends in healthcare and how the company can expand its addressable market.

Tuesday 3/9

Chevron holds its 2021 investor day virtually. The company’s executive leadership, including CEO Mike Wirth, will discuss the oil giant’s transition to cleaner energy, among other topics.

Walt Disney holds its annual shareholders meeting.

The National Federation of Independent Business releases its Small Business Optimism Index for February. Consensus estimate is for a 96.3 reading, slightly higher than January’s 95 figure. January’s reading was the lowest for the index since May.

Wednesday 3/10

Campbell Soup, Franco-Nevada, and Oracle announce quarterly results.

Verizon Communications holds its 2021 investor day. CEO Hans Vestberg and other senior executives will discuss the company’s progress on its 5G rollout, as well as the results of the recent FCC C-band spectrum auction, where Verizon successfully bid $45 billion, more than all of the other U.S. wireless carriers combined.

The Bureau of Labor Statistics reports the consumer price index for February. Economists forecast a 0.6% month-over-month gain, after a 0.3% rise in January. The core CPI, which excludes volatile food and energy prices, is expected to edge up 0.2%, compared with a flat reading in January.

Thursday 3/11

The ECB announces its monetary-policy decision. It is expected to keep its deposit rate unchanged at negative 0.5%, even as bond yields have risen sharply this year on expectations of strong economic growth.

DocuSign, JD.com, and Ulta Beauty hold conference calls to discuss earnings.

T-MobileUS has an analyst day, when senior leadership will discuss the company’s strategic priorities as well as provide an update on the synergies achieved almost a year after the merger with Sprint was completed.

IHS Markit and S&P Global hold special shareholder meetings to seek approval for their proposed $44 billion merger, first announced in late November. If the all-stock transaction is completed, S&P Global shareholders will own about 68% of the combined entity, with IHS Markit shareholders owning 32%.

Friday 3/12

AT&T holds an analyst day to update its business strategy and discuss its capital-allocation plans.

The BLS releases the producer price index for February. Expectations are for a 0.5% monthly rise in the PPI, and a 0.2% uptick the core PPI. This compares with gains of 1.3% and 1.2%, respectively, in January.

Write to Avi Salzman at avi.salzman@barrons.com

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