Walmart Inc. and Green Dot Corp. reported Tuesday they have extended the prepaid program manager’s agreement with the giant retailer for another seven years, assuring that Green Dot will continue to serve as the issuing bank and manager for the Walmart MoneyCard program.
Walmart says the new contract begins Jan. 1, replacing one that would have expired in May. The prepaid Walmart MoneyCard launched in 2006, with Pasadena, Calif.-based Green Dot as the manager and GE Money Bank, now Synchrony Bank, as the original issuer.
Bentonville, Ark.-based Walmart characterized the extension as helping to uniquely position it to “offer an unmatched set of customer experiences that sit at the nexus of omnichannel retail and tech-enabled financial services,” Daniel Eckert, senior vice president of Walmart Services and Digital Acceleration, says in a statement.
Though neither company released financial details of the new agreement, at least one analyst considers it a big positive for Green Dot, which has six contracts with Walmart, according to a research note from William Blair & Co. “The extended length of the extension is a surprise given all other contracts were three years and show’s Walmart’s commitment and confidence in the company,” says William Blair analyst Robert Napoli. He estimates that the six contracts with Walmart represented 37% of Green Dot’s revenue in 2018, and that the MoneyCard extension removes a risk to that revenue.
Walmart and Green Dot also announced Tuesday that they will jointly establish TallFin Labs LLC, a financial-technology provider accelerator. Its mission is to help develop new, omnichannel shopping and financial services. The companies anticipate many of TallFin Labs’ efforts will use Green Dot’s banking-as-a-service platform.