The largest retailer in the world is making an aggressive move into the world of consumer banking.
Walmart Bank isn’t quite up and running just yet, but with more than 200 million Walmart store visits per day, the company is in a unique position to set itself up as an all-in-one retail and banking destination.
In this post, we’ll cover everything there is to know about Walmart Bank so far, including its new partnerships, acquisitions, and banking products that could be available.
Walmart Bank: What We Know So Far
Walmart has been indirectly providing banking services to its massive customer base for more than a decade.
From going after a bank charter to working with third-party institutions to offer financial products, the retail giant has tried almost everything — aside from actually launching its own bank.
At this point, there’s more that we don’t know than there is that we do, but all signs are pointing toward Walmart making a significant splash in the fintech world.
It’s important to note that none of this is necessarily new. Walmart has clearly been interested in getting into the banking industry for years. At one point in the 2000’s it even applied for a bank charter.
Despite the eventual abandonment of that effort, Walmart has continued to work its way around and offer a wide variety of banking products like credit cards, pre-paid debit cards, check cashing services, and cash deposits.
The buzz around Walmart’s latest foray into banking is mainly centered around two recent developments.
Walmart Bank: Recent Announcements
First, in January of 2021, Walmart announced that it is planning to launch a new fintech company in a partnership with Ribbit Capital, which you might recognize as the same company that backed other fintech companies like Robinhood, Credit Karma, and Affirm.
This announcement was relatively vague but suggested that the new company would combine Walmart’s market presence in the retail industry with Ribbit’s history of success in the fintech world to provide tech-driven banking solutions to Walmart’s customers and employees.
Walmart indicated that the company’s mission would be to develop and offer “modern, innovative and affordable financial solutions” and will seek to grow through partnerships with and acquisitions of leading fintech companies.
Walmart Bank: Key Talent
Walmart also added a couple of experienced leaders from Goldman Sachs to head up the new project.
Omar Ismail and David Stark, formerly of Goldman’s consumer banking division, are the two top bankers joining the team.
This is significant because of the success of Goldman Sachs’s relatively new online high-yield savings account (HYSA) division — Marcus — which now boasts nearly $100 billion in deposits.
That’s a lot of groceries!
Walmart Bank Products & Features
Walmart hasn’t released any information about the products it intends to come out with, but there are some safe assumptions to make based on how Walmart could serve its current customers and employees.
From a demographics perspective, Walmart’s customers and employees tend to be low to middle income, which is a profile that isn’t always in the main sights of big banks.
Therefore, a low-cost, convenient banking solution is what Walmart is likely after
Walmart’s biggest advantage is scale. With over two million global employees and more than 200 million daily customers, the opportunity to offer financial services to the people already associated with it is huge.
Current Financial Products & Services
To get an idea of where it is right now, here’s a look at the financial services that Walmart currently provides through the Walmart Money Center.
With the addition of a fintech company, all of these products and services will likely be expanded upon.
Walmart already provides free ATM access through its partnership with the MoneyPass network.
Offered through Capital One and Mastercard, the Walmart Rewards Card comes with no annual fee and 5% cashback for 12 months on Walmart purchases.
Pre-Paid Debit Cards
Walmart offers two pre-paid debit cards — the Walmart MoneyCard is backed by Green Dot Bank, also known as GoBank, and is a subsidiary of the Green Dot Corporation.
The other option is Bluebird by American Express, which allows you to add cash to your card at Walmart Locations and comes with a linked checking account option.
When you need to send money, you can make domestic and international online money transfers through Walmart2Walmart.
Walmart partners with Affirm to provide installment financing on purchases, which you can pay back over 3, 6, or 12 months.
Financing is an area that Walmart’s new fintech could aim to explore, with the possibility of establishing itself as an equal housing lender to provide mortgages.
On payday, you can head over to a Walmart to cash your check or have the funds loaded onto a pre-paid debit card.
What We Can Expect
Whether Walmart will partner with a third-party bank or eventually try to become a member FDIC institution on its own is still unclear.
Still, there are a couple of areas where the new venture is likely to focus.
Walmart already has a well-regarded mobile app in addition to walmart.com, and some financial analysts have suggested that the new fintech company will focus more on the financial aspects of its mobile banking app platform than traditional banking.
Within a new “super app,” Walmart could provide access to retail and grocery shopping, as well as regular banking services like mobile check deposits, eStatements, and online bill pay.
Online bank accounts are possibly the biggest opportunity for Walmart as it makes its move.
As we mentioned, Walmart has a huge, loyal customer base that it has built through convenience and low-cost leadership. With the addition of in-house savings and checking accounts, there could be a big opportunity to develop that relationship further.
Any bank accounts offered by Walmart would likely mirror its strategy, with low or nonexistent monthly fees, overdraft protection, and options for direct deposit, not to mention exclusive offerings or opportunities for increased savings on Walmart purchases.
Alternatives to Walmart Bank
Walmart is just one of the non-bank companies making a play at entering the online banking space in a major way.
Square Inc. recently got its hands on an industrial bank charter, while other companies like SoFi are in the process of doing so.
To get an idea of what we might expect, it might be worth looking at Marcus by Goldman Sachs, the bank’s high-yield savings account.
It’s unlikely that Walmart’s eventual offerings will totally mirror Marcus. Still, with two former Goldman bankers now on Walmart’s payroll, we can expect that some of the features that have led to Marcus’ success might show up.
Does Walmart have a bank?
Not yet. Walmart does not officially have its own bank; however, it is in the process of entering the fray to provide expanded financial services.
In the 2000s, Walmart pursued a banking charter but eventually withdrew the application after significant banking industry pushback.
Since then, Walmart has continued to provide financial products like credit and debit cards, cash deposits, and check cashing services.
What is the name of Walmart Bank?
We don’t know the name of the new fintech company that Walmart is opening, but names like Bank of Walmart have been thrown around. We’ll keep an eye out for any newly registered trademarks.
Is Walmart Bank Right For You?
We would say the jury is still out on Walmart Bank, but the reality is that there simply isn’t anything to judge just yet. The information that we have is limited, so anything beyond speculation is tough at this point.
If you’re a current Walmart customer or employee, be sure to keep an eye out for more developments.
Based on what we know about Walmart as a company, any new financial products are likely to mirror what it already does well, so for those who like what Walmart has to offer, expect to see more of the same.
We’ll keep this post updated as more information becomes available — Until then, keep doing the good work of spending and saving wisely!