Walmart plans to create a fintech start-up with Ribbit Capital, a backer of Robinhood and Credit Karma.
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Western Union stock jumped more than 7% early Tuesday, following news that the payments company has agreed to offer money-transfer services at Walmart, an announcement fresh on the heels of the retailer’s push into fintech.
Western Union (ticker: WU) money-transfer services will be available at 4,700 Walmart (WMT) locations across the U.S., for both domestic and international transfers, money orders, and bill payments, beginning in the spring. It is the first time Western Union services will be available at the retail giant.
Western Union was up 7.1% to $23.46 in early trading. The stock, which is roughly flat since the start of the year, has fallen 21% in the past 12 months. Walmart was up 0.4% to $145.15 in morning trading.
Shares of MoneyGram International (MGI), which last fall announced an extension of its agreement to offer money-transfer services at Walmart locations, is down 4.8% to $6.92.
The Western Union news comes a week after Walmart announced it would create a fintech start-up with Ribbit Capital, a backer of Robinhood and Credit Karma. As Barron’s noted at the time, the company already offers a number of financial services, including money orders (not offered by Western Union), check cashing, and credit cards, as well as exposure to digital payments via its ownership in the Indian e-commerce firm Flipkart.
One of the knocks against the Ribbit Capital collaboration was concern that Walmart’s core customers, many of whom don’t have access to bank accounts or credit, will be unlikely to take advantage of “tech-driven financial experiences.” That is less likely to be a criticism this time because Western Union’s services have historically been historically used by people without access to traditional banking services.
The move is just the latest in a string of partnerships that Walmart has announced in its quest to become a one-stop shopping destination, with offerings ranging wealth management to health care—a particular advantage as the pandemic presses people to consolidate their shopping trips.
Write to Teresa Rivas at [email protected]
