Prepaid player Green Dot is stepping into the lending game with a marketplace for loans.
The move will happen in 2016, CEO Steve Streit announced yesterday at the US Treasury Financial Inclusion Forum in Washington, D.C. The marketplace, to be called Green Dot Money, will leverage Green Dot technology to match low- to moderate-income borrowers with loan products.
The marketplace also offers “a lot of value-added services” to both borrowers and lenders, according to Streit. One of those is a significantly lowered cost of acquisition. Green Dot expects to make $100 to $200 per loan, and approve about 20% to 30% of applications, Streit said.
Lenders in the marketplace would include community banks, according to Green Dot. The prepaid player announced another expansion to its product offerings on its third quarter earnings call Nov. 6, a small business banking account called GoBusiness, based on its GoBank mobile checking account.
The name Green Dot Money is similar to Green Dot Moneypak, a discontinued prepaid reload product that will be replaced in Q1 2016 by Moneypak Plus, an offering with a more secure enrollment process. The original Moneypak was associated with a number of high-profile scams.
A busy 2016
Primarily known for its industry-leading prepaid card, Green Dot is serving up a host of new offerings in 2016 built on its bank platform and leveraging its charter. Streit also announced a 5% cashback debit card due to hit shelves in January, and a site called Green Dot Direct that digitally brings together the company’s multiple products and channels. He also discussed the company’s solution for small businesses, targeting the woefully underserved on-demand economy. The account will allow for instant payment to delivery services, using GoBank’s realtime payments service. Green Dot is also launching a secured credit card that can help customers declined from traditional cards to improve their credit.
Green Dot stock [NYSE: GDOT] closed 0.36% higher to $16.79 a share for a P/E ratio of 20.33. The company’s market capitalization now stands at around $873 million.