NRF Article written by Karen Kroll

 

While many retailers have long offered credit cards, a growing number are providing a wider range of financial services, often partnering with a financial technology company (“fintech”) to make the shift. The goal, says WSL Strategic Retail CEO Wendy Liebmann, is “to build loyalty when shoppers are buying anywhere and everywhere.”

In January 2021, Walmart announced a partnership with fintech investment firm Ribbit Capital. The venture, Walmart said, would bring together Walmart’s retail knowledge and scale with Ribbit’s fintech expertise, and deliver tech-driving financial experiences for Walmart’s customers and employees.

 

Driving customer engagement

At the same time, the fintech sector — which combines expertise in financial services, software development and network operations — seeks greater access to customers, says David Ball, president of retail consultant The Grayson Company. “Digital retailers and fintech firms are developing increasingly intertwined ecosystems,” he says.

 

New skills and technology are key

To be sure, success isn’t guaranteed. Providing financial services requires different skills and technology than retail, as well as compliance and operational expertise.

Ball says startup costs are high, and “it’s easy for retailers to become distracted from their core merchandising businesses.”

The arrangements most likely to succeed might be partnerships between retailers and financial services firms, Ball says, “with retail providing access to an expanded customer set, along with its traditional capabilities in product and distribution, while financial services (firms) retain their traditional role as the facilitators of commerce.”