Green Dot Retains Wal-Mart MoneyCard Account
Green Dot Corp. GDOT 0.39 % reached an agreement with Wal-Mart Stores Inc. WMT 0.07 % to continue as the issuing bank for the retailer’s prepaid reloadable debit card program for an additional five years.
Green Dot shares surged 31% to $ 20.02 in after-hours trading
The companies had worked together on Wal-Mart’s MoneyCard program since its 2006 inception, but Green Dot shares have declined 25% so far this year through Monday’s close, partly on concerns about the possibility of losing the business.
The new term, which became effective May 1, replaces an agreement that was already extended to the end of the year.
Green Dot also worked with the retailer on last year’s rollout of a checking account service called GoBank, which doesn’t charge overdraft fees, unlike other the banks housed within the retail giant.
Green Dot separately unveiled a stock buyback program on Monday worth $ 150 million.
When the MoneyCard made its debut, GE Capital Retail Bank was the issuing bank, while Green Dot was the program manager and service provider. The parties announced in 2013 that Green Dot Bank would take over as issuing bank.
Green Dot went public in 2010. The company has faced competition from large lenders who have rolled out their own prepaid cards. The GoBank launch was part of an effort to branch out beyond underbanked consumers. Green Dot has increased its emphasis on technology like mobile payments, including the 2012 purchase of mobile location-based app developer Loopt.
Last year, Green Dot bought tax-refund processor Santa Barbara Tax Products Group for about $ 320 million.
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