A prepaid card company leader, Green Dot, Corp., has announced that it will be launching a traditional bank account with debit card feature sometime this year. Prior to this, Green Dot’s prepaid cards were typically not linked with these services. While features of prepaid cards are ever improving, this is a big change.
Green Dot took a quantum leap into traditional banking with the acquisition of Bonneville Bancorp in Provo, Utah, in December. Their ability to take this leap will put them in direct competition with big banks and give them the opportunity to try to lure away a segment of big bank customers.
There have been some similar initiatives – on a much smaller scale — by other prepaid card companies but they involved third party partnerships with banks and distribution markets. This will be the first prepaid card company to offer traditional banking services with debit card features that actually has its own bank — and a vast distribution network to issue and distribute cards themselves.
This “crossover” will enable Green Dot to offer services to customers not available to other prepaid companies or traditional banking customers. The benefit over traditional cards and services promises to be lower fees. The fee schedule and other details have not been announced, since the company has not yet received final regulatory approval. This is will be the first regulatory approval of its kind.
Prepaid cards continue to gain credibility and with this credibility enhanced features and lowering fees will benefit consumers as companies continue to compete for your business.
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