Walmart fintech startup A to launch buy now pay later loan

ONE Walmart-backed startups are looking to compete with buy-now, pay-later companies.

The venture, called One, is preparing to launch its own version of the payment service as soon as next year, according to a source familiar with the matter.

One, which is majority owned by Walmart, wants to launch a service that shoppers can use on Walmart’s website and stores, as well as at other retailers, the source said. The effort was partly motivated by a more challenging economic backdrop and consumers feeling pinched by inflation.

Shares of buy now, pay later fixed Confirm fell on Friday. Walmart declined to comment.

A break into the growing payment services category as monthly retail sales numbers continue to rise, but some Americans are showing signs of strain from inflation that is driving up the prices of food, housing and more. These stretched wallets may spur consumer interest in paying for purchases in other ways. Buy now, pay later allows customers to gradually pay off a purchase with fixed monthly payments, along with interest.

Retail executives, including Walmart CEO Doug McMillon, have talked about even wealthier consumers feeling squeezed by inflation. About 75% of the retailer’s grocery market share has come from households earning more than $100,000 over the past two quarters.

In a CNBC interview this week, McMillon said customers are feeling stressed.

“We have some customers who are more budget-conscious who have been under inflationary pressures now for several months,” he told CNBC’s “Squawk Box.” “The continued pressure in some categories I think is something customers will have to deal with as we approach Christmas.”

News of the Walmart-backed startup’s interest in buy now, pay later was first reported by The Information.

Walmart, the nation’s largest private employer and its largest grocer, has long offered financial services in many of its stores. It has a money center where customers can go for banking-related services, such as writing checks, sending or receiving money or loading prepaid debit cards. Many of these services are aimed at families who have a lower income, don’t have a relationship with a traditional bank or don’t have the credit history to qualify for a credit card.

Last year, Walmart went a step further by creating and backing a fintech startup with Ribbit Capital, one of the investment firms behind Robinhood. The fintech startup is independent, but Walmart has the largest stake. The board also includes several top executives, including Walmart US CEO John Furner and CFO John David Rainey. Rainey, Walmart’s new CFO, recently joined the board and is a former PayPal CFO.

Since Walmart created and backed the startup in early 2021, it’s gotten bigger. It acquired two other fintech startups, One and Even, for an undisclosed amount early this year. It adopted the name One and aims to be an all-in-one app where consumers can manage their money.

One is headed by Omer Ismail, who headed Goldman Sachs’ consumer bank. It also includes some other Goldman veterans.

Buy now, pay later has become a more crowded area, with companies including Affirm, PayPalKlarna and AfterPay all offer their own versions. apple also announced plans to launch its own buy now, pay later option, Apple Pay Later.

Walmart already offers a buy now, pay later option to customers through Affirm. Ahead of last holiday season, it ended its open-air program and replaced it with buy-now, pay-later financing.