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  • Frank Tian

When Walmart Wants to Offer Credit …

20 years ago, I was in a meeting to discuss the possible expansion of a private label credit card with a grocery store partner.

One executive said it makes sense. He could put the weekly purchase of $150 to $200 on the card, then pay off at the end of the month.

I still clearly remembered my thoughts at that moment.

As a new graduate and a single guy, my weekly grocery purchase was only $20-$30 at the time. I am not sure it is worth putting it on the card.

The private label credit card never brought on a grocery store partner, before it was sold to a specialty card operator.

20 years later, the ticket size at grocery stores has grown. You should pat yourself on the back if you ever leave the store with a bill under $100.

Decent ticket size, high frequency, necessity purchase. These make grocery stores a great place to use credit.

Amid the pandemic, credit card and BNPL began to target grocery and food purchases.

No wonder Walmart wants to strike on its own, as its credit card portfolio has steadily grown to $9 billion USD over the years, under the partnership first with Synchrony then Capital One.

Modern technology also makes it easier for non-bank consumer businesses to take on banking business.

As we celebrate the easy credit access nowadays, it needs to be recognized that some have to revolve their grocery purchases on credit.

There are deeper social-economic reasons behind the affordable living issue.

For that, credit can only be a temporary solution.

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