Late last night, Green Dot announced that it will acquire the Wal-Mart reloadable prepaid card program (Wal-Mart MoneyCard) currently issued by GE Capital Retail Bank.
The MoneyCard is one of the largest prepaid cards in the country. When combined with Green Dot,
Green Dot Bank will have a sizable lead over any other bank in the prepaid space. Likewise, Green Dot will lap the next largest program manager, NetSpend, by another large increment.
Prepaid card deposits were only a fraction of GE Capital Retail's balance sheet. As such, Green Dot Bank will not become a large bank as defined under Durbin. This could mean that Wal-Mart
MoneyCard consumers suddenly find that their cards will be able to do more, most notable of which is the possibility that those cards will now come with online billpay.
It also provokes the question of how pricing might change. Outside of Wal-Mart, Green Dot cards come with a monthly fee of $4.95. MoneyCards cost $3.00 per month.
The "decider" may be Wal-Mart, as the behemoth can usually influence the price of products that are offered on its shelves. In fact, it is probably more accurate that Wal-Mart tells a vendor how much its product will cost, take it or leave it. Thus, if Wal-Mart wants the MoneyCard issued by Green Dot Bank to cost three dollars, then it will cost three dollars.
Green Dot says that it hopes the transaction will close quickly - perhaps in as few as three or four months.