Checking accounts from the world's largest retailer.
Walmart Inc., the world's largest retailer, is poised to launch a digital bank account for its 1.6 million US employees and legions of weekly shoppers. According to people with knowledge of the matter, the company will offer the accounts to thousands of workers and a small percentage of its online customers in the coming weeks.
Walmart has been trying to expand its financial services offerings. One, the financial technology startup Walmart is leaning on for the effort, is hoping to offer a plethora of other products, from loans to investing, in an effort to become a one-stop shop for consumers' financial needs. Lawmakers and regulators will be watching closely.
Representatives for Walmart and One wouldn't say anything.
At One, the work is being led by a former Goldman Sachs Group Inc. partner who left his post as head of the firm's consumer bank in early 2021. Walmart said only that it was designed to develop and offer modern, innovative and affordable financial solutions.
The ambitions have started to take shape. The venture announced in January that it would acquire One Finance Inc.
The combined companies, which have operated under the One name since the deals were completed in April, had 200 employees and more than $250 million in cash on their balance sheet at the end of the day. Laura Nadler is the CFO of Afterpay and Apple Inc. has a head of customer operations.
The company is majority-owned by Walmart. John Furner is the Chief Executive Officer of Walmart US.
Most of the work has been done from the WeWork office in Manhattan, but there are also offices in San Francisco and California.
Walmart has been interested in financial services for a long time. Money center locations allow customers to cash checks, access tax-preparation services and send money overseas through partners such as MoneyGram International Inc. Capital One Financial Corp., Synchrony Financial and Green Dot Corp. are some of the companies that offer credit and prepayment cards through the giant.
The company has set bigger goals.
The opportunity to make it digital is right in front of Walmart, the company's chief executive officer said last year. There are so many digital products that we can build that will help people with managing their family's expenses and their accounts.
Critics were surprised when Walmart applied to be an industrial bank. Walmart wanted to use the charter to process credit and debit card transactions internally, which would have saved it millions of dollars annually. Walmart withdrew its application.
A different path has been chosen by the retailer. The One venture relies on a partnership with Coastal Community Bank to provide other banking services. One of the people said that the company would continue partnering with the community.
Walmart has 5,335 stores in the US and One has access to more of them than any other bank. More than 85% of the US population lives within 10 minutes of a Walmart store, according to the company.
As it plots its expansion, One will have to spend less on marketing and customer acquisition than its competitors.
Walmart's chief financial officer said at an investor conference in March that customer acquisition cost is something the company already brings to the table. Customer acquisition costs should be lower for us.
The One venture is trying to get people to buy things. According to one of the people familiar with the matter, Walmart will soon be giving 2% back for every dollar spent at drugstores, gas stations and Walmart itself. Walmart employees who set up direct deposit will be paid as soon as their shift ends, at no cost to them.
McMillon wants to be the best place to shop. We want to improve their lives by helping families reduce the cost of money and save for the future.
Sridhar Natarajan assisted with the project.
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