Green Dot has had its share of trouble in recent years — MoneyPak fraud, the attempted ouster of CEO Steve Streit, and strong entrants taking it on its core competency of prepaid cards. But none of that has stopped the company from launching new products at a regular clip — GoBank for Business, GoBank for Uber, credit cards, the loan marketplace Green Dot Money, and multiple tax return and payroll products.
The reason for the flowering of products, according to CEO Steve Streit, is the bank’s “high-scale enterprise level proprietary technology platform,” first built for the GoBank mobile bank account. Green Dot began in 1999 as a vendor of prepaid cards, envisioned as being used for minors making purchases online. In reality, the company created an entire category of payment product that now accounts for 5% for all spending in the U.S. In 2011, it bought a one-branch bank in Utah, and leveraged the charter to create GoBank, which went live in 2013. Here’s how Streit described the company’s relation to to its platform on Wednesday’s earnings call:
Today Green Dot is comprised of six diverse business divisions, each solving a particular customer problem with unique products and services, each with its own business strategy and growth plans, each synergistic to the other, and providing thrust to the consolidated top-line with each operating on top of our high-scale enterprise level proprietary technology platform, which allows that top-line growth in the period to fall to the bottom-line at increasingly expensive margins.
Streit went on to say that the platform, and the vertical integration it allows, is Green Dot’s advantage over the rest of the market:
While some fintech players have one piece of the puzzle and others may have another piece, to my knowledge, no one fintech player has it all except for Green Dot. It is our intention to use our platform’s compelling and unique assets to continue building upon our current base of successful products and services to realize the potential of what the future banking can look like, when you marry Silicon Valley technology with a highly regarded, well capitalized bank charter.
The platform underlying all Green Dot’s business was developed back in 2013 by Sam Altman and Alok Deshpande of Loopt, which Green Dot acquired. The lack of modern cores among banks and specialization of most fintech startups may put Green Dot in a category of its own. As modern core vendors, such as Nymbus, gain ground (which is an if rather than when), will banks prove as agile and willing to take risks as Green Dot?3 - Readers Like This Post