GoBank

From @AmerBanker:

After months of internal testing, GreenDot (GDOT) is rolling out a beta version of its mobile consumer checking account, the aptly named GoBank.

The launch of the iPhone and Android app is the culmination of several acquisitions, including the purchase of Bonneville Bancorp in Provo, Utah (now Green Dot Bank) and geolocation company Loopt.

The test puts the prepaid card company in the same league as Simple (formerly BankSimple), which is itself in beta; Movenbank, which plans to launch in late February; and American Express, which is marketing its Bluebird fee-less, prepaid account with Walmart.

What sets GreenDot apart, asserts chief executive Steve Streit, is the company isn’t relying on a third party to hold its customers’ deposits.

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Green Dot Takes A Nose Dive

I was shocked when Green Dot revised its end of year expectations Thursday night.

From @AmerBanker:

Green Dot Sharply Lowers Profit Forecast, Citing Threat to Model

Over the past few months, as Green Dot’s chief executive Steve Streit met with all of his company’s major retailer partners, one thing became certain: Most of those stores could start putting competing products on their shelves.

So, in an effort to be up front, the Monrovia, Calif., prepaid card company announced late Thursday that it was lowering its yearend revenue forecast by about 9%, to a range of $534 million to $543 million, and reducing its earnings-per-share projections from a range of $1.65 to $1.70 to a range of $1.29 to $1.32.

“The industry is evolving. We have effectively been alone in terms of retail, and now that we believe that won’t be the case we wanted to … reforecast,” Streit told American Banker in an interview Friday. “We would rather have an investor sell a share because of what they know rather than not sell a share based on what they do not know. We always want to be up front.”

Like most analysts, Gil Luria of Wedbush downgraded his rating of the company to Neutral from Outperform.

In a note to investors, he says:

We believe retailers’ change of heart on introducing multiple brands of GPR cards creates substantial uncertainty going forward.

The stock took an equal dive losing more than 60 percent of its value before the start of the weekend.

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Still, even though Green Dot has bled more than $1.6 billion in market cap since it IPO’d two years ago, I think the company has a future.

The only question is how profitable the business will be…

The Culture of Serve

Earlier this year, I took a trip to American Express’ Serve office in Silicon Alley.

I originally wrote a story about the credit card company’s new focus.

This latest article is a longer look at the raison d’etre behind why Amex moved its digital division out of its World Trade Center headquarters.


From American Banker Magazine:

Amex Recalls NJ Gift Cards

From The Record:

Retailers are threatening to follow American Express’ lead and pull their gift cards from New Jersey stores rather than let the state claim unspent card funds under an unusual state law designed to help close a budget gap.

The Christie administration-proposed law enacted in June 2010 — apparently the only such state law in the nation — was aimed at helping to balance the 2011 state budget by raising as much as $80 million. The law allows the state to consider an unused gift card “abandoned” two years after its purchase, and to take custody of the balance, which formerly reverted to the issuer.

What I’m unsure of, as of 8 this morning, is Amex just recalling their gift cards from the Garden States’ shelves, or is it all its prepaid cards…

[Update 10:54 a.m.]

Response from Amex:

The NJ law requires zip code collection for Gift Card purchasers at the point of sale. Because American Express sells its Gift Cards through third-party independent retail partners, we are not able to ensure compliance with that part of the law. As a result, we cannot conduct any third party sales, such as those through retail locations, financial institutions, and third party selling websites, of our Gift Cards in NJ. Consumers in New Jersey can still purchase American Express Gift Cards online at www.americanexpress.com/gift. American Express Gift Cards will also continue to be accepted at locations throughout New Jersey where American Express is accepted.

[Update 1:20 p.m.]

You can see my short @AmerBanker story on the news, here.

[Update: April 5, 2012]

Prepaid distributor and marketer InComm is pulling its gift cards from New Jersey shelves, as well. Blackhawk followed this announcement with a similar release that said it, too, will be pulling its gift cards from the Garden State.

Google Snags TxVia

[Update April 4, 2012]

Reuters blogging editor Felix Salmon mentioned my @AmerBanker story in his latest blog post.

Google’s late evening announcement that it has acquired payments technology company TxVia gives the search engine giant the ability to start solving its Google Wallet’s security issues.

In the digital wallet’s infancy, observers pointed out  flaws that put the technology in doubt.

The TxVia acquisition, announced Monday, can change that. TxVia owns a payments platform that allows card managers to set risk rules that take into account the specific attributes of mobile payments.

TxVia’s platform is “flexible and nimble,” says Madeline K. Aufseeser, a senior analyst with Aite Group. “It gives [Google] the ability to create add on-features and services that are specific to a digital wallet component.

Read my @AmerBanker story, here, and my first story of the acquisition, which was posted last night, here.

Less Than Famous (PrePaid) Faces

Do you ever wonder about the more serious faces behind celebrity-backed prepaid cards? I do.

And, while I won’t put The Approved Card or The RushCard in the same category as The Young Money Card, it’s safe to say there is a lot of experience behind those flashy pieces of plastic.

It’s important — at least this is what analysts tell me — to make sure you don’t compare these cards just on their fees alone. Each is marketed to a different customer segment — placed in different stores, and available through different channels.

I’ll place my @AmerBanker story, here, when it’s posted.

BillMyParents Button

Late in 2010, BillMyParents Inc. dropped its signature internet button, which placed parents in the middle of transactions of their teenage children.

It worked like this:

Kids check off items they want to buy on an eCommerce or social media website. Parents approve those purhcases. And, voila, a payment is made.

The San Diego company, however, decided to lose the technology in favor of its prepaid SpendSmart MasterCard.

BillMyParents head Mike McCoy says it’s been a smart move. You can read my @AmerBanker story to find out why, here, when it’s posted.

It's a Very Smart Card