When retail giant Walmart Inc. and PayPal Holdings Inc. announced nearly a month ago that PayPal customers will be able to withdraw cash from, and deposit cash into, their accounts at U.S. Walmart stores, a major partner in that service wasn’t mentioned. On Wednesday, prepaid card services provider Green Dot Corp. revealed it’s the one that makes it all possible behind the scenes.
The Walmart-PayPal service, expected to debut this month, sends a bar code to the PayPal account holder’s mobile phone, which can be redeemed for a cash withdrawal or deposit at a Walmart store. The program uses Green Dot’s so-called Banking-as-a-Service platform that enables outside companies to use Green Dot technology to develop new financial products.
“We’re proud to let you know that this is a Green Dot BaaS-powered program, with both Walmart using our platform to facilitate the transaction on the store side, and PayPal using our platform to generate the bar code to the PayPal customer’s cell phone on the Web-mobile side,” Green Dot chief executive Steve Streit said on the company’ third-quarter earnings conference call with analysts. “Green Dot’s BaaS platform facilities the connection between the retail point of sale and mobile bar-code technology, handles customer service, and processes and settles the crediting and debiting of funds for all the parties involved in the transaction.”
How much new revenue the program will generate for Pasadena, Calif.-based Green Dot wasn’t disclosed. But in addition to the Walmart-PayPal service, the BaaS platform is generating a healthy amount of new business from other companies, according to Streit and chief financial officer Mark Shifke. Existing users of Green Dot technology include Apple Inc. for its Apple Pay Cash service.
Purchase volume on Green Dot cards rose 13% year-over-year in the third quarter to $5.92 billion, while total dollar volume on its products jumped 18% to $9.09 billion. Cash transfers increased 9% to 10.7 million. Active accounts at the quarter’s end were up 3% from a year ago to 5.43 million.
Green Dot posted operating revenues of $230.6 million, up 14% from $201.6 million in 2017’s third quarter. Net income fell 67% to $4.57 million from $13.6 million a year ago, mainly due to one-time expenses related to an acquisition and stock-based compensation for retirement-eligible employees, according to Shifke.