Green Dot Gets Regulatory Nod on Walmart Prepaid Issuing Takeover (Nov. 25, 2013)
Green Dot Corp.’s plan to take over issuing duties for Walmart’s MoneyCard prepaid line has earned regulatory approval from the Federal Reserve and the Utah Department of Financial Institutions, paving the way for the deal to close early next year. First announced in June, Green Dot’s takeover of issuing for the Paybefore Award-winning MoneyCard from current issuer GE Capital Retail Bank brings one of the largest GPR programs in the industry under the Green Dot umbrella. Green Dot has served as program manager for the MoneyCard line since its launch in 2006, and now will assume issuing duties as well, through the company’s Green Dot Bank subsidiary.
Beyond consolidating issuing and program manager duties under one roof, the deal also leaves Green Dot well-positioned to earn considerable interchange revenue from the MoneyCard program, industry observers note. Because Green Dot Bank has less than $10 billion in assets, the bank is exempt from Federal Reserve rules that restrict larger banks’ interchange rates under the Durbin Amendment. Earlier this month, Walmart unveiled six new prepaid cards, four of which are under the MoneyCard program, and all of which are being issued by Green Dot Bank. News of the regulatory approval gave a boost to shares of Green Dot stock, which jumped 6 percent in early trading today on the NYSE.
Green Dot also announced today it’s expanding its relationship with MasterCard so holders of the payment network’s rePower-enabled prepaid cards now can reload their cards at more than 4,000 Walmart stores throughout the U.S. via the retail giant’s swipe-based Rapid Reload service. MasterCard, which initially partnered with Green Dot to build its rePower reload network in the U.S., said earlier this year that rePower is live in four European countries.