Retailers Must Collaborate with Fintechs to Avoid Failure

Retail must partner with fintechs or prepare to fail

By: Vitaliy Shtyrkin, Chief Product Officer at B2BINPAY

As the retail industry evolves, large companies must recognize that relying solely on their internal capabilities to innovate leads to stagnation. Engaging with fintech companies is crucial for retailers looking to remain competitive in the fast-paced digital environment, especially as blockchain technology begins to dominate the financial landscape.

Key Takeaways

Large retailers have historically tried to develop payment solutions independently but are now realizing that their size can hinder innovation.
Fintech companies operate with more agility and fewer restrictions, allowing them to innovate faster and more effectively.
Partnerships between retailers and fintechs can help overcome innovation barriers, with recent examples from Walmart and Shein highlighting this shift.
The future of digital finance may rely on crypto-native infrastructure, where collaboration is essential for success.

The Challenge of Scale in Retail

For years, major retailers have invested heavily in creating their own fintech divisions, believing they could develop effective payment solutions in-house. While they had some initial success, the landscape has shifted. Today, corporations, despite their vast resources and global presence, are discovering that money alone does not drive innovation.

The reason lies in how scale can be a burden. Large corporations often become entangled in bureaucracy, regulatory scrutiny, and antitrust issues, all of which can slow down their responsiveness. In contrast, fintech disruptors have fewer limitations and can adapt rapidly to changing market needs. They are already implementing solutions such as white-label products and localized lending using blockchain technology, which processes billions of dollars in stablecoins each day.

Why Size Is No Longer an Advantage

At first glance, the size of large corporations seems to give them an edge, thanks to their extensive market reach, brand recognition, and significant budgets. However, when it comes to fostering innovation, this same scale can actually become a drawback.

Every novel idea within a large corporation faces a lengthy pathway of legal approvals, regulatory checks, and risk assessments. A concept that could be tested by a fintech in weeks might take a retailer a year to gain the necessary approvals. Moreover, shareholders exert pressure, expecting companies to protect and grow their substantial investments. Consequently, larger retailers tend to prioritize predictable projects over riskier experimental ones.

As a result, funds that could support innovative offerings are often redirected towards safer, incremental improvements. Even when innovation budgets are approved, they frequently remain in "pilot mode," never becoming integrated into the core business activities.

In 2024, the Federal Trade Commission blocked a significant retail merger worth $24.6 billion, citing concerns over reduced competition that could lead to increased prices. This incident highlights the risks that major retail agreements pose, complicating the pursuit of innovation.

For retailers, their size has transitioned from an advantage to a major obstacle, making authentic innovation increasingly difficult. In contrast, fintech companies enjoy the freedom to experiment, and in a rapidly evolving market, agility often proves more valuable than bulk.

Embracing a Pro-Tech Approach

Small and mid-sized fintech companies are less constrained by regulatory burdens and shareholder expectations, enabling them to operate with greater agility. Their structures promote a culture where technology is not merely a support function, but the essence of the business.

This ability allows them to launch, test, and adjust products swiftly, positioning fintechs as pioneers of progress in the retail landscape. Their "pro-tech" mindset ensures they avoid the pitfalls of outdated infrastructures and legacy systems by building on modern platforms.

These companies use cloud-native architectures, modular APIs, and microservices to facilitate quick integration of new technologies like blockchain without lengthy approval processes.

This advantage positions fintechs to shape the future of digital finance, a role that retailers have yet to fully adopt. Nevertheless, some retailers, including Walmart and Shein, are beginning to realize that partnering with fintechs can break their innovation stasis.

For instance, Walmart selected a new buy-now-pay-later (BNPL) provider in 2025, recognizing the benefits of collaborating with a nimble fintech that could adapt to changing consumer demands. Similarly, Shein launched a co-branded credit card with a Mexican fintech in 2024, acknowledging the value of local expertise over building a financial product from scratch.

These strategic moves indicate a noteworthy shift, as corporations that once aimed to marginalize fintech companies are now increasingly reliant on them to enhance their core offerings.

Looking Ahead: Partnership is Key to Success

The initial steps with BNPL services and co-branded credit cards are just the beginning. The greater challenge lies in adopting crypto-native infrastructure, which includes tokenized payments, blockchain settlement solutions, and digital loyalty programs. However, hurdles such as multi-jurisdictional compliance and the high costs of in-house blockchain development continue to multiply.

This highlights the widening gap: while retailers grapple with substantial restrictions, fintechs are swiftly constructing the necessary frameworks for future financial systems.

For example, Circle has integrated USDC into various payment networks, elevating a stablecoin to a mainstream payment method. In emerging markets, startups are creating APIs for stablecoin-linked cards, allowing businesses to access crypto payment options without needing to build their solutions from scratch.

Retailers risk falling behind if they choose to go it alone, casting themselves back into bureaucratic delays and inefficiencies that previously inhibited their progress. Therefore, forming partnerships with fintechs stands out as the most viable path forward. Fintechs bring the technical infrastructure, while retailers contribute their market reach, paving the way for scalable and successful products.

The lesson for corporations is clear: in today's landscape, having scale without innovation leads to stagnation. As blockchain technology continues to gain traction, retailers who acknowledge this reality will play a pivotal role in shaping the future, while others may fade into obscurity.

By: Vitaliy Shtyrkin, Chief Product Officer at B2BINPAY.