No, Wall Street Can’t Ignore Walmart

Its move into finance could chip away at some of traditional banks’ most profitable fees

- Brendan Case and Jenny Surane

Alarm bells sounded on Wall Street in early 2021 when a financial-technology outfit backed by Walmart Inc. lured two highly regarded executives away from Goldman Sachs Group Inc. The world’s largest retailer had been trying for years to expand into financial services. Perhaps, the thinking went, it was finally poised to take on big banks.

Eighteen months later, the fintech business— known as One—is emerging from the shadows with an upgraded app and a looming marketing push. For now, the venture looks less like a threat to the masters of the financial universe and more like a tool for Walmart’s push to kee Amazon.com Inc., which has grown beyond its e-commerce roots into a behemoth offering consumers everything from prescription drugs to their favorite television shows to groceries. But traditional financial institutions still could face trouble if the giant brick-and- mortar retailer aggressively adds banking to its line of consumer businesses.

The overarching goal for Walmart is to build an array of services that complement its low-margin retail operations while keeping shoppers inside the company’s “ecosystem,” as the industry lingo goes. For Walmart, that means expanding not only through banking services but also through digital advertising, health care, an online marketplace with third-party sellers, and a membership program not unlike Amazon Prime. “We’re building a different business, and we’re making progress,” Chief Executive Officer Doug McMillon said on the company’s latest earnings call in August.