When retail juggernaut Walmart reported its second-quarter earnings this week, it gave a rundown of some of the opportunities it’s targeting on the payments front.
The discussion ensued during the company’s Tuesday earnings call with analysts after one of them asked the company’s new chief financial officer, John Rainey, for his perspective on Walmart’s fintech’s businesses. Rainey, who was the CFO at digital payments pioneer PayPal until a few months ago, had a lot to say.
“I am a believer in what's happening in digital payments, fintech broadly, and the secular tailwinds that exist there with consumer behavior moving more digital, more online,” Rainey said. Then, he lauded the retailer’s moves in that direction by expanding its e-commerce capabilities, its online marketplace offering and expanding financial services.
“As I have an early peek into what the company is doing, I've got to say I'm very impressed with the broad capabilities and the resources devoted to this,” Rainey said on the call. “And so, I think it's a huge opportunity for Walmart going forward and frankly one of the reasons that I'm so excited to join – to be part of this and help shape this outcome.”
Rainey joined the Bentonville, Arkansas-based retailer in June after nearly seven years at PayPal. Now, he’s bringing the experience he gained there to his new employer.
Walmart has been building its services in the digital payments realm in recent years. Specifically, the retailer hired two top Goldman Sachs executives from that company’s consumer bank last year to join its Hazel venture and launch a financial services app business, targeting workers and consumers alike. To make it happen, the venture with Ribbit Capital bought two California fintechs earlier this year. At that time, Walmart said that one of the former Goldman executives, Omer Ismail, will become CEO of its new “super app” business, to be called One.
Aside from that home market venture, Walmart is investing in payment plays in other countries, too. One of them in India, called PhonePe, is making progress, the executives said on the call. Walmart International CEO Judith McKenna chimed in to note that PhonePe is not only a payments offering, but also a merchant services play, allowing for a two-sided network presence. She noted that its total payment volume rose during the quarter to $830 billion, on an annualized basis, up from $770 billion in the prior quarter.
PhonePe, which is majority owned by Indian e-commerce company Flipkart, also recently made two acquisitions in May to expand its payments business in the wealth management arena.
“I share the excitement that we all had when we went to India and met with the team,” Rainey added. “To put it in perspective, what PhonePe is doing, if you look at the largest digital payments companies outside of China and the world, PhonePe after a very brief history is already roughly two-thirds of the size of that and what is going to be the largest market in the world in a very short period of time.”