Walmart-Backed Fintech One Challenges Affirm with Buy Now, Pay Later Expansion

Walmart’s fintech startup, One, has recently entered the realm of buy now, pay later (BNPL) loans, marking its transition into lending within the retail giant’s ecosystem. The move, disclosed by CNBC, positions One in direct competition with Affirm, a prominent player in the BNPL sector, which has been the exclusive provider of installment loans for Walmart customers since 2019.

This expansion of One’s services signifies a brewing battle within the retail landscape, encompassing fintech firms, card companies, and traditional banks. One’s initiative aligns with its overarching ambition to evolve into a comprehensive financial superapp, offering a seamless blend of savings, spending, and borrowing capabilities.

Since its inception in 2021, One, under the leadership of CEO Omer Ismail, a Goldman Sachs veteran, has been disrupting the financial sector’s status quo. Despite operating discreetly from a modest Manhattan office, the company has been actively developing its product portfolio, which includes a debit account launched in 2022.

The recent move by One places it in direct competition with existing partners of Walmart, such as Affirm, potentially reshaping the dynamics of the retail industry. Notably, during a recent visit to a New Jersey Walmart, advertisements for both One and Affirm competed for attention, reflecting the increasing presence of BNPL options in physical retail spaces.

BNPL has gained popularity among consumers for purchases ranging from everyday items to significant investments. Its prevalence in online spending has surged, with BNPL transactions amounting to $19.2 billion from January to March, marking a 12% year-over-year increase.

Despite declining to comment on their partnership with Walmart, Affirm’s shares rebounded following the news, indicating investors’ confidence in the company’s resilience amid heightened competition.

For Walmart, One represents a strategic move towards diversifying revenue streams beyond traditional retail operations. Following a similar playbook as rival Amazon, Walmart aims to leverage its scale and customer base to expand into high-margin sectors such as finance and healthcare. The acquisition of TV maker Vizio for $2.3 billion in February underscores Walmart’s commitment to bolstering its advertising business.

One’s emergence as a significant player in the financial sector symbolizes Walmart’s persistent efforts to establish a foothold in banking. Despite facing regulatory hurdles in the past, Walmart has adopted a partnership-driven approach, collaborating with industry leaders to offer financial services to its customers.

With an eye on the future, One aims to transcend its current offerings, potentially expanding into investment services and other financial products. Leveraging Walmart’s vast employee base and retail footprint, One is poised to capture a significant share of the financial services market.

As One continues to evolve, its expansion into lending signifies a broader trend within the fintech landscape, characterized by increased competition and innovation. While challenging existing incumbents, One’s integration within the Walmart ecosystem presents a unique opportunity to reshape the retail finance landscape, offering customers a seamless and holistic financial experience.