Fintech Startup With Walmart Backing to Launch Buy Now, Pay Later Service

A Walmart-owned fintech startup is aiming to shake up the buy now, pay later (BNPL) industry, which is currently dominated by businesses like Affirm. Friday’s news caused a dip in Affirm’s stock shares.

According to CNBC‘s unnamed source, One is planning to launch a service that Walmart shoppers can use both in stores and online. The service is set to launch within the next year and could help ease economic volatility and consumer anxiety over inflation.

CNBC reports that due to inflation, Americans are experiencing increased costs in areas such as housing and food. To combat this, many people have turned to alternative payment methods like BNPL, which allows consumers to make smaller monthly payments instead of one large lump sum.

Walmart’s interest in One is not surprising, considering the retail company has long offered different financial services to its lower-income customers through money centers. At these locations, customers can print checks and load prepaid debit cards; they can also wire money.

CNBC reports that One comes from a Goldman Sachs background — it is led by Omer Ismail and David Starks, investment banking veterans who left Goldman in early 2021 to join the Walmart-backed startup.

With buy now, pay later (BNPL) already established by companies such as Affirm, Klarna, and Afterpay, it’s evident that there is space in the market for more businesses. In fact, Dealroom lists a total of 214 BNPL firms with valuations ranging between $9 million to $3 billion.

Walmart’s entry into the BNPL space may signal a shift in the market, especially due to its relationship with millions of customers. Walmart’s BNPL service will likely be a welcome addition for customers looking for more convenient payment solutions.

If successful, the company could become one of the largest players in the BNPL market. It remains to be seen how this will impact existing companies in the space, such as Affirm. For now, the announcement is a sign of what could come as Walmart continues to expand its presence in financial services.

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