Wednesday , July 28, 2021

Through an Expanded Walmart MoneyCard, Green Dot Sharpens Its Focus on Banking Services

Green Dot Corp. has been steadily building its product roster in financial services for the underbanked, with the latest development emerging this week in the form of an expanded focus for the 15-year-old Walmart MoneyCard. The prepaid card, issued by Green Dot Bank and branded by Mastercard or Visa, can now function as a demand-deposit account, with online access for its more than 1 million holders, Green Dot and Walmart announced Thursday.

Services now available on the card include cash back, overdraft protection up to $200, direct deposit, and the ability to earn interest on savings, the companies said, while adding that other features can also be accessed. Yet more services are coming, promised Brandon Thompson, an executive vice president at Pasadena, Calif.-based Green Dot, in a statement. 

New and existing customers can tap into the card’s new functions either online or at Walmart’s more than 4,500 stores or at more than 90,000 retail locations in Green Dot’s network, the companies said.

The new product follows a recent trend by fintechs and other nonbanks to tap into a higher profit potential by offering expanded financial services, particularly services traditionally controlled by banks. A recent example is American Express Co.’s launch earlier this month of a small-business checking account backed by technology from Kabbage, a company it acquired last year.

The expansion of the MoneyCard into demand-deposit services “speaks to the encroachment of alternative banking options for consumers and small businesses,” says Patricia Hewitt, principal at PG Research and Advisory Services, a Savannah, Ga.-based consultancy. “Offering DDA services direct to consumers closes in on the last mile of traditional banking services.”

The card also represents another thrust by Green Dot into financial services for its consumer base. Earlier this year, it launched Go2Bank, a mobile bank account offering credit and debit cards, direct deposit, and a savings account. The product is aimed at gig workers and others stretching their incomes between paychecks. In February, Green Dot chief executive Dan Henry pronounced it the 22-year-old company’s most successful launch.

Banking services depend on Green Dot Bank, an institution the company acquired in December 2011. The bank then was called Bonneville Bancorp but was rechristened soon after the acquisition. To help prepare for its expanded mission in banking services for consumers, Green Dot in February hired Amit Parikh from Apple Inc. to run Green Dot’s banking-as-a-service franchise.

Walmart and Green Dot are also investing in acquiring new customers for the beefed-up MoneyCard. On Thursday, they announced new holders who activate the card in a store or online can get a $20 bonus by making a deposit of $500 or more by Aug. 15.

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