Green Dot Corporation

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Green Dot Corporation
Public
Traded asNYSEGDOT (Class A)
S&P 400 Component
IndustryFinancial services
Founded1999 (1999)
HeadquartersPasadena, California
Key people
Steve Streit, CEO
ProductsPrepaid MasterCard and Visa cards
Websitewww.greendot.com

The Green Dot Corporation (NYSEGDOT) is an American financial technology and bank holding company headquartered in Pasadena, CA. It is the world's largest prepaid debit card company[1] by market capitalization. Green Dot is also a payments platform company and is the technology platform used by Apple Pay Cash,[2] Uber, and Intuit. The company was founded in 1999 by Steve Streit as a prepaid debit card for teenagers to shop online. In 2001, the company pivoted to serving the "unbanked" and "underbanked" communities. In 2010, Green Dot Corporation went public[3] with a valuation of $2 billion. Since its inception, Green Dot has acquired a number companies in the mobile, financial, and tax industries including Loopt, AccountNow, AchieveCard, UniRush, and TPG.

Green Dot Corporation is an issuer of prepaid MasterCard and Visa cards in the United States. These products are available at nearly 100,000 retail stores[4] including CVS, Rite Aid, Walgreens, Dollar Tree; as well as discounted offerings at Meijer and Walmart. Green Dot also transfers individuals' direct deposit funds (such as Social Security payments) from the US government to personal bank accounts. They also provide co-branded card programs to Walmart, Boost Mobile, AT&T and Citibank. In 2007, Green Dot raised $20M in funding,[5] including Sequoia Capital as an investor. In 2008, Green Dot ceased to offer prepaid Discover cards.[6]

The cards are normal debit cards, and not a line of credit. Purchases are deducted from the balance stored on the card. The user can add more money to the card by paying cash at a retail store's point of sale, or in certain cases from their paycheck.

History[edit]

The Green Dot corporation was founded in 1999 by Steve Streit. Green Dot was formerly known as Next Estate Communications. The first debit card to be sold was I-GEN in the year 2000. It was geared toward teenagers and Internet users. In 2001 the first I-GEN MasterCard was sold at a Rite Aid in Virginia. In 2002 the first Green Dot debit cards were sold at more Rite Aid stores as well as CVS Pharmacy, and Pantry Convenience stores. In 2003, the I-GEN card was sold in over 18,000 stores nationwide and geared toward adults. In the year 2004, I-GEN officially changed its name to Green Dot and started the first cash-accepting network for reloading the debit cards. In 2005, Green Dot created additional debit cards for everyone's needs. Finally, by May 2006, Green Dot sold more than two million cards nationwide and opened more retailers to issue more cards internationally.

On July 22, 2010, Green Dot Corporation went public and started trading on the New York Stock Exchange[7] under the stock ticker: GDOT

In early 2012, Green Dot acquired the mobile location technology company, Loopt, for $43.4 million. Green Dot retained all of the employees of Loopt, which became the team to design and build Green Dot's mobile checking account brand, GoBank.

In 2013, with the acquisition of Loopt’s technology and workforce, Green Dot developed GoBank, the first bank account designed to be opened and used from a mobile device.[8] In 2016 GoBank, became the platform that was used by Uber, the ride share company, as the principal payment processor of the company’s drivers.[9] Green Dot regards this as their pivot from a prepaid debit card company into a platform company.

In 2014 Green Dot Corporation acquired Santa Barbara Tax Products Group,[10] the largest tax refund processor in America.

Green Dot continued its acquisition of competitive companies in 2015,[11] that offered either a customer base or platform with its acquisition with its purchase of both the Account Now Inc., and Achieve Card.

On September 24, 2014, Walmart announced it would be partnering with Green Dot Bank to begin offering Walmart customers checking accounts. The accounts will be provided through GoBank, Green Dot’s mobile checking service[12]

In 2016, Green Dot Corporation’s brand, GoBank, partnered with Uber to launch the ‘Uber Debit Card[13]’ – a checking account for Uber drivers to cash out their ride fare immediately.

On January 30, 2017, it was reported that UniRush LLC would be sold to Green Dot Corp. in a deal valued around $147 million. The deal, to close at the end of the quarter, was said to add around 750,000 cardholders to Green Dot's network.[14]

In early December 2017, Green Dot Corporation announced that it was powering the Apple's new Apple Pay Cash P2P payment service.[15]

Cards[edit]

Green Dot debit cards are available in many stores, including CVS Pharmacy, Kmart, 7-Eleven and Walgreens.[16] This is only a temporary card which does not have the customer's actual name on it; instead it says "Valued Customer". Temporary cards are not re-loadable However, if the customer opts in to receive a personalized card, which is free of cost, in 7 to 10 business days it will arrive in mail with his or her name on it. Personalized cards are re-loadable in a variety of ways. There is a monthly charge of $9.95, unless the customer makes more than 30 purchases in a month or loads the card with more than $1000 in that month.

Reloading process[edit]

The personalized card can be reloaded using MoneyPak, which is available in the same stores GreenDot prepaid is. Most stores charge $5.95 for reloading.[17] Card users can also opt to have their payroll transferred directly to the card through direct deposit[18] and the card acting as their checking account. Additionally, the cards may be re-loaded using ACH transfers online directly from a bank account and even from PayPal.[19] PayPal in 2014 discontinued accepting MoneyPak cards due to high volume of unsatisfactory ratings of Green Dot and its products.

Reputation[edit]

As of December 2017, Green Dot has the following ratings:

Web site Rating (out of 5) Notes
Yelp 1 95% reviews received 1 star (December 2017) [20]
Amazon 2.6 72% of reviews received 1 star (December 2017)[21]
Credit Karma 1.2 95% of reviews received 1 star (December 2017)[22]
Consumer Affairs 3.8 47% of reviews received 5 stars (December 2017)[23]

The majority of unfavorable reviews, listed in the sites above and other review sites, complain of Green Dot limiting access to a positive balance in the card, even though the funds have been added to the card with a cash purchase. The reviews also underscore the unwillingness or incapacity of Green Dot customer service to resolve these issues. The majority of recent positive reviews on Consumer Affairs mention the convenience and speed of automatic direct deposits.[24]

Security concerns[edit]

While convenient, Green Dot's MoneyPak cards lack the security measures such as identity verification found in credit cards, limited cardholder liability, and the ability to dispute fraudulent charges so that money lost due to fraud cannot be recovered.[25][26][27]

  • In March 2010, the Better Business Bureau reported a rise in scams involving MoneyPak where unsuspecting victims would pay for items by loading a MoneyPak card, emailing the number to the "seller" only to have the "seller" drain the account and never deliver the promised product.[28]
  • In June 2011, the Better Business Bureau and the Minnesota Department of Public Safety issued warnings regarding the illegal use of Green Dot's MoneyPak cards to defraud consumers.[26]
  • In January 2012, The office of New York State Senator Martin Golden issued an alert from Con Edison regarding various scams, including "Green Dot scams."[29]
  • In March 2012, Time magazine reported on how the 419 scam was now being adapted to the relative anonymity of MoneyPak cards.[30] The AARP Issued a warning on the rise of MoneyPak fraud in 2012[31] that followed the decline in MoneyGram fraud after MoneyGram was fined 18 million dollars "to settle FTC charges that it allowed its money transfer system to be used for fraud".[32]
  • In August 2012, the FBI also issued a warning that scammers were taking advantage of MoneyPak's untraceability to coerce unwitting victims into paying a "ransom" to unlock their computers infected with malware.[33] AVG Technologies notes that in some cases (like the FBI scam), criminals are using malware to deceive victims into thinking their computer has been flagged for serious crimes, after which the relatively easy anonymity of MoneyPak cards is taken advantage of to allow for "untraceable" extortions.[34]
  • Beginning in mid-2013, Green Dot MoneyPak cards were being used to commit fraud, with persons asking callers under the guise of a customer service agent for a utility company such as a power or gas provider asking for immediate payment under threat of disconnection using a personal card or asking the caller to head to a store selling Green Dot cards and giving them the card number the funds were placed on.[35] Several national chains now have policies of asking the customer to confirm the purpose of their use of the card for these amounts and will refuse to execute the transaction if this type of scam is suspected for the use of the card.
  • In September 2013, several Walgreens and other large chain drug stores through the United States were evacuated because of bomb threats called into the stores, with the caller asking for a 'ransom' from the stores of multiple Green Dot cards with large amounts activated using store registers which would then be placed in an unmonitored location for the culprits to pick up, or the numbers read through the phone.[36][37]
  • In 2015, scammers were taking advantage of Green Dot cards when filing false income tax returns using compromised Social Security numbers. The criminal opens a Green Dot account in the victim's name, making that account the payee for a refund claimed on the fraudulent tax return. The stolen SSN is used both to file the false tax return and to open the Green Dot account, which is emptied if the refund is paid. The victim receives an unexpected letter containing a permanent (embossed with the victim's name) Green Dot card for the account, a probable indicator of SSN compromise and attempted fraud.[38]

References[edit]

  1. ^ Surane, Jennifer. "Author". Bloomberg.com. Retrieved 14 February 2018.
  2. ^ Surane, Jennifer. "The Inventor of Prepaid Debit Cards Is Going Mobile". Bloomberg.com. Bloomberg. Retrieved 14 February 2018.
  3. ^ Arington, Michael. "Green Dot: The $2 Billion IPO You've Never Heard Of". TechCrunch.com. TechCrunch. Retrieved September 28, 2010.
  4. ^ White, Ronald. "Green Dot is targeting the 'unhappily banked' for its prepaid cards". Los Angeles Times. LA Times. Retrieved 2015-02-22.
  5. ^ "Green Dot Gets $20M".
  6. ^ "Discover Shutdown Page".
  7. ^ "Sv1za". www.sec.gov. SEC.
  8. ^ "Pay-what-you-want GoBank puts mobile users first". USA Today. USA Today. Retrieved 17 June 2013.
  9. ^ "Uber unveils host of features to appease drivers". Vator.tv. Vator. 2016-06-06. Retrieved 16 June 2016.
  10. ^ Beckerman, Josh (2015-06-22). "Green Dot Retains Wal-Mart MoneyCard Account". Wall Street Journal. Retrieved 22 June 2015.
  11. ^ Mercator. "Green Dot Buying AccountNow and Achieve Card Solidifies Its Position as Number One". www.mercatoradvisorygroup.com. Mercator Advisory Group. Retrieved 14 March 2015.
  12. ^ "Walmart to begin offering checking accounts".
  13. ^ Kar, Ian. "Uber is offering a new debit card that will help its drivers get paid instantly". Qz.com. QZ.
  14. ^ Armental, Maria (January 30, 2017), "Green Dot to Buy UniRush For $147 Million", Wall Street Journal, retrieved January 31, 2017
  15. ^ Ryan, Phillip. "Green Dot's Bank-as-a-Service Scores Deals with Apple, Intuit". bankinnovation.net. Bank Innovation. Retrieved 8 November 2017.
  16. ^ "Green Dot products are available at over 50,000 retailers nationwide".
  17. ^ "Reload with MoneyPak".
  18. ^ "Green Dot - Add Funds-Direct Deposit".
  19. ^ "Green Dot - Online reload from a bank account".
  20. ^ "Green Dot Corporation". Yelp. Retrieved 16 December 2017.
  21. ^ "Green Dot". Amazon. Retrieved 16 December 2017.
  22. ^ "Green Dot® Gold Prepaid Visa Card Reviews". Credit Karma. Retrieved 16 December 2017.
  23. ^ "Green Dot Prepaid Cards". Consumer Affairs. Retrieved 16 December 2017.
  24. ^ "Recent 5 Star Reviews for Green Dot Prepaid Cards". Consumer Affairs. Retrieved 16 December 2017.
  25. ^ "MoneyPak - Green Dot - Deposit Money to Any Cards". www.moneypak.com.
  26. ^ a b "BBB, DPS warn of MoneyPak scams - BBB News Center".
  27. ^ "City of Mill Valley : City News : Seniors Targeted with Debit Card Scam".
  28. ^ "Golden Gate Better Business Bureau: Start With Trust". goldengate.bbb.org.
  29. ^ "Con Edison Warns Public to Beware of Scammers". 26 January 2012.
  30. ^ White, Martha C. "Old 'Nigerian Lottery' Scam Gets a New Twist". Time – via business.time.com.
  31. ^ Kirchheimer, Sid. "Green Dot MoneyPak Card Scams - Wire Transfer, Prepaid Debit".
  32. ^ "MoneyGram to Pay $18 Million to Settle FTC Charges That it Allowed its Money Transfer System To Be Used for Fraud". 20 October 2009.
  33. ^ "New Internet Scam". Federal Bureau of Investigation.
  34. ^ "New Blackhole ransomware graphic mimics the FBI".
  35. ^ "Con Edison Warns Public to Beware of 'Green Dot' Scams" (Press release). New York State Public Service Commission. 25 June 2012. Retrieved 20 September 2013.
  36. ^ Matesic, Emily (16 September 2013). "FBI Investigating Walgreens Bomb Threats". WBAY-TV. Retrieved 20 September 2013.
  37. ^ Connolly, Caroline (18 September 2013). "Bomb threats in Utah could be part of national scam". KSTU-TV. Retrieved 20 September 2013.
  38. ^ "Oak Creek Police Warns Residents to be Aware of Fraudulent Tax Returns" (Press release). City of Oak Creek, Wisconsin. 20 March 2015. Retrieved 23 May 2015.

External links[edit]