Green Dot to Replace GE Capital as Walmart MoneyCard Issuer (June 10, 2013)
Green Dot Corp. will benefit from its exempt status from debit interchange caps by becoming the issuer of one of the largest GPR programs on the market—the Walmart MoneyCard. Green Dot Bank, which also serves as the issuer for Green Dot’s GPR cards, replaces GE Capital Retail Bank, which is bowing out of the relationship to focus on its core consumer credit business, Green Dot announced last week. Green Dot has served as program manager for Walmart’s reloadable prepaid card since its 2006 launch. By consolidating its role as issuer and program manager, Green Dot is further cementing its partnership with Walmart, a major prepaid card provider. Terms of the transaction, outlined in a June 7 Securities and Exchange Commission filing, were not disclosed. The deal is expected to close in mid-2013.
Green Dot will finally gain the full advantage of operating Walmart’s GPR card program, including earning interchange margins, analysts suggest. Because Green Dot’s bank has fewer than $10 billion in assets, it is exempt from Federal Reserve rules capping larger banks’ interchange rates as a result of the Durbin Amendment. “Green Dot makes the right move here,” Madeline Aufseeser, a senior analyst with Aite Group, tells Paybefore. “Converting the Walmart MoneyCard to its own issuing bank cuts out the middleman and preserves interchange margins for this powerful alliance,” she notes.