Another Mega Tech Company Enters The Banking Realm

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3 min read

The banks are done.

About a month ago, I wrote an article basically making that same statement. Some took exception to it believing that the major banks were not going anywhere.

Yet, here we are a month later and we see another major technology company entering the space.

Who is it you ask?

The company is none other than Walmart.

Walmart a technology company? Exactly.

Over the last year, I made the case on a number of different occasions how Walmart is now on the mega technology companies out there. With some of the highest revenues in the land, this is a force to be reckoned with.

Most still view it as a retailer but that is a mistake. Walmart is every bit as aggressive with technology as Amazon is. Sure, the later has a head start yet the mega-retailer is catching up quickly.

Remember Walmart's interest in TikTok? Why did this company have an interest in a mobile application? The reason is because of the mobile payment system it has.

This is a company that is also investing heavily in AI and robotics. The point that I always stress is how long until, instead of buying the AI or the robots, they buy the entire company?

Now we see another avenue they are pursuing.

FinTech did quite a number of the banking industry over the last 15 years. Stalwarts of that industry were taken away by financial innovators from the tech space. In the United States today, more than half the loans originate outside the banking industry. Quicken is the largest originator of loans, not Bank of America or Chase.

Walmart is ready to get involved itself. Here is what was said about the announcement:

Mega-retailer Walmart has founded a financial services-focused fintech startup alongside Ribbit Capital, an investor of fintech firms, according to a Monday announcement.

The as-yet-unnamed startup will be centered around "modern, innovative and affordable financial solutions," according to a press statement.

So far, so good. Just typical "this is what we plan to do" stuff. We know starting anything from scratch is always a challenge. Nevertheless, with Walmart's existing customer base, it might be able to make a go of it.

It is of great help that their partner already raised $1.3 billion across 11 funds. Expect the partnership with Walmart to seek to go that number significantly.

However, there is something that was even more telling.

Walmart's press statement pointed to a future of acquiring other services, indicating that "growth may come through partnerships and acquisitions with leading fintech companies."

Here is where much of the rub comes in. Walmart, which is basically a cash machine, is going to use those funds to acquire leading fintech companies. If writing out a check is all it takes to grow those numbers, it is a given. Acquisitions Walmart can do in droves if they want.

What is interesting is that crypto is also getting some attention.

How cryptocurrencies or blockchain technology might potentially fit into the mixture remains to be seen. As previously reported, Walmart has sought patents related to use cases in the digital currency arena, including one that outlines a kind of USD-pegged stablecoin. Walmart has also taken part in pilot programs involving the use of blockchain for product tracing.


A Walmart stablecoin? Talk about a game changer in the United States. Can you imagine the impact of a Walmart stablecoin on the market?

Certainly this is all speculation at this point since the details and plans are not revealed at this point. However, the main emphasis is that one of the largest companies in the United States, by revenue, is now getting heavily involved in the FinTech arena.

As I said a month ago, this does not bode well for banks. Ultimately, there are very few aspects of finance that Walmart could not get involved in if it desired.

Those of us who are around crypto for a number of years always felt that crypto would, eventually, do in the banks. It now appears that crypto coupled with a major corporation like Walmart is going to put a serious hurt on them.

We will see what Walmart unveils but I would expect it not to make the bankers feel warm and fuzzy.

I also have a feeling the Walmart application is going to enable users to do a lot more than just shop for different items.

Times are changing very rapidly.

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