‘We’re Building the Plane While We’re Flying It,’ Says Green Dot’s Boss About Soaring Go2Bank

Green Dot Corp.’s big bet on the underbanked has gotten off to a flying start, to hear the company’s top executives tell it. The bet is on Go2Bank, a mobile bank account that offers credit and debit cards, direct deposit, and a savings account. “It’s been great to see the response we’ve gotten so far from customers,” chief executive Dan Henry said Monday during an earnings call to discuss the company’s fourth-quarter results. “Registration is even stronger than we thought it would be,” he added, without revealing numbers.

The product, which the company launched early last month to capture customers like gig workers and others stretching their incomes between paychecks, represents 22-year-old Green Dot’s most successful launch, Henry said. “We are asking customers to commit to Go2Bank as their primary bank account,” he told analysts on the call. To help them make that decision, Green Dot is waiving account fees for customers who sign up for direct deposit.

But Green Dot isn’t done with the product. It plans to add yet more features, including investment options and a buy now, pay later credit facility, Henry told analysts. “We’re building the plane while we’re flying it,” he said about a product that he also said would be Green Dot’s last launch branded by the company. “This is it,” he pronounced with a tone of finality.

Another high-profile Green Dot service, banking-as-a-service, has attracted a roster of high-flying clients that rely on Green Dot Bank to support ventures in card issuing and other services. These include e-commerce giant Amazon.com Inc., which in the fourth quarter launched a debit card through Green Dot. “These partnerships illustrate our strategy to partner only with high-end businesses,” Henry said.

Banking-as-a-service depends crucially on the Utah-based Bonneville Bancorp, which Green Dot acquired in December 2011 and soon renamed. On Monday, Green Dot announced it had hired Amit Parikh away from Apple Inc., where he had been helping to run Apple Pay, to manage the BaaS franchise.

“The conversations we’re having with our BaaS partners are, how can we take this to the next level…what’s the next chapter?” Henry said.

For the quarter, the Pasadena, Calif.-based company reported $6.86 billion in purchase volume, up 9% year-over-year. Purchase volume excludes activity in which certain BaaS partners earn interchange and Green Dot earns what it calls a platform fee. It reported 5.45 million active accounts for the quarter, up 8%. Operating revenue totaled $284.3 million, a 14% rise.

For a year in which card revenues and other fees rose dramatically in the face of the Covid pandemic, companywide revenue climbed 13% to $1.25 billion.