Green Dot’s Great Quarter

Green Dot reported some fantastic results on Thursday.

In its 10-q, released on Thursday afternoon, Green Dot revealed incredible growth. More people using their prepaid cards, and they are loading more dollars on to them, too.

Consider these metrics and the comparison with the same quarter one year ago:

• 1.82 million new cards (up 23 percent)
• 8.28 million cash transfers (up 29 percent)
• They now have 4.1 million active cards (up 27 percent)
• $3.6 billion in new loads (up 53 percent)

More people finding more ways to use their cards. Nothing could speak more clearly about the surging growth of the prepaid model in general and Green Dot’s execution on that promise.

OK, maybe I am being a bit too optimistic. Still, I can’t help but be satisfied by these numbers. Green Dot has a model that works because they reward their customers for using their cards. Instead of making their money on fees, they rely on interchange. Green Dot waives a monthly fee if you use the card 30 times in one month. There are still people out there that are paying for the privilege of having a card, but they are the ones whose use of the card is so limited that Green Dot has no choice but to extract some kind of revenue in order to cover their costs.

CEO Steve Streit also mentioned that Green Dot is now the exclusive reload network for the new Amex prepaid card. Green Dot will also be the loader for a new payroll prepaid card offered by ADP (issued by First California Bank.)