Walmart’s Fintech Arm Acquires Two Firms In Financial Services Super App Quest


According to the Wall Street Journal, retail giant Walmart announced that it will acquire two fintech startups including Even Responsible Finance, which Walmart already uses to offer its employees early wage access, and ONE Finance, a neobank.

According to Omer Ismail, chief executive of Walmart’s fintech unit and former head of Goldman Sachs’ Marcus business:

“The strategy is to build a financial services super app, a single place for consumers to manage their money.”

The Wall Street Journal reported that the acquisitions are expected to close in the first half of 2022, and that Walmart still has about $250 million in cash for further acquisitions or investments.

Walmart first announced its plans to launch a fintech unit back in March 2021. At that time, I published an article titled Walmart’s Fintech Ambition: A Super App, Not The ‘Bank Of Walmart’ and wrote:

“Walmart’s fintech aspiration is a lot bigger than just creating a digital bank—it’s creating a true digital ecosystem in the form of a super app.”

Wait, What’s a Super App?

While hardly a household term in the US—yet—the “super app” concept is often misused and misunderstood. Just selling a lot of different types of products and services on a mobile app does not make an app a super app.

Super apps are ecosystems. They’re enclosed experiences that make it easy to accomplish a wide variety of tasks—as long as the tasks occur within the walled garden.

To date, super apps don’t really exist in the US—but they’re dominant in China. A screen shot of one of the leading super apps, WeChat, demonstrates the breadth of services integrated into a single app.

The following chart shows a comparison of services included in three of Asia’s most popular super apps.

The super app term is often misused here in the US because the technical aspects of a super app are misunderstood.

Super apps rely on mini programs—lightweight apps that run inside another app. They don’t need to be downloaded or upgraded through app stores. They make it possible for one app to perform the service of many apps.

Walmart Has a Long Way to Go to Becoming a Super App

Walmart’s super app opportunity is a lot bigger than just acquiring and integrating a neobank and earned wage access provider.

To achieve super app status, Walmart will need to integrate its: 1) Shopify marketplace; 2) Connect ad platform; 3) health centers; and 4) existing investments in eCommerce, logistics, supply chain, and inventory management.

This won’t be an easy task.

Two factors have prevented—or at least, provided resistance to—the development of super apps in the US:

  • Industry structure. Many industries in the US are dominated by oligopolies—three to four really large firms that control 60% to 80% (or more) of the market share in that industry. A company from outside that industry trying to create a super app will be met with resistance from the oligopolies who may see themselves as potential super app creators.
  • Consumer behavior and attitudes. The heterogeneity of the US population in terms of wants, needs, and desires means that the loss of choice that inevitably comes from using a super app will be rejected by a large number of Americans.

So, Walmart won’t be able to create a super app in the US, right? Not necessarily. There are two reasons why Walmart’s prospects for a super app in the US are legit. Walmart has:

  • An underserved customer base. Practically everyone in the US shops at Walmart at some point, but the company’s core segment—non-urban, low- to middle-income consumers—is often underserved by the oligopolies dominating many industries.
  • A head start. Walmart may be starting from scratch in building a super app, but it has decades of experience of building an integrated, cross-industry supply chain. With the exception of Amazon, who else can make that claim (and I’m not even sure Amazon could make that claim)?

While Walmart will position a super app in terms of how it benefits low- to middle-income consumers, the company stands to benefit significantly from a successful walled garden. Its DNA is efficiency and cost control—and that’s the ultimate promise of a super app for the supercenter.

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