Green Dot Begins to Look Like the Go-To Prepaid Reload Network

The booming popularity of prepaid cards has created opportunities for payments companies far beyond just issuing plastic cards. The reloading of already-issued prepaid cards, for instance, is emerging as a major business. And that means Monrovia, Calif.-based Green Dot Corp.'s 40,000-location reload network is attracting attention from such big companies as MasterCard Worldwide and General Electronic Co.'s GE Money Bank. MasterCard and Visa U.S.A. are both in the process of building their own reload networks, rePower and ReadyLink, respectively. And GE Money recently introduced the Wal-Mart MoneyCard prepaid card for leading retailer Wal-Mart Stores Inc. But two of these companies, MasterCard and GE Money, have concluded that using an existing reload network is a faster way to give utility to their fledgling prepaid cards than building a reload system entirely from scratch. The new MoneyCard, for instance, can be reloaded not only at Wal-Mart stores, but also at Green Dot network locations (Digital Transactions News, June 25). The latest company to ride on Green Dot's rails is MasterCard, which in seeking to expand rePower this week announced a partnership with the network. Under it, consumers will be able to reload MasterCard- and Maestro-branded prepaid cards at Green Dot Financial Network locations that include stores in the CVS Caremark Corp., Walgreen Co., and Rite Aid Corp. pharmacy chains, electronics retailer RadioShack Corp., and Wal-Mart. According to MasterCard, Green Dot retailers won't have to make any point-of-sale changes to accommodate rePower reloads. For Green Dot, the MasterCard partnership not only promises more volume, but a higher profile as consumers look for convenient places to reload their prepaid cards. “Our network aims to become the default retail solution for moving cash between consumers and acceptance partners,” Mark Troughton, Green Dot's president for Cards & Network, tells Digital Transactions News via e-mail. “We're proud to have earned MasterCard's partnership. It is very important to us strategically, and their transaction volume is important financially. This deal is especially beneficial to our retail partners who will now benefit from new sales and foot traffic without having to make any changes or investment.” MasterCard formally announced rePower's creation last December and has spent this year putting the network together. Its first partner was InComm Corp., an Atlanta-based provider of cell-phone top-ups and other prepaid systems and technology to 145,000 retail locations that is adding rePower service to some of its outlets (Digital Transactions News, Dec. 21, 2006). Under the MasterCard-Green Dot agreement, rePower-enabled cards will be reloadable using Green Dot's MoneyPak product sold at the 40,000 locations. “We always had a strategy where we could be working with strategic partners,” says Ron Hynes, MasterCard vice president for prepaid. “What Green Dot does is gives us a much broader scope and reach.” In addition, Green Dot will perform various management and processing services for MasterCard. “Green Dot will be handling everything that is required to take cash from a customer in retail and move it, and the accompanying electronic message, to the MasterCard network,” says Troughton. This includes managing retail relationships, product development, in-store merchandising, cashier training, retail connectivity and transaction processing, and customer services, including telephone and Web-based interfaces. Green Dot says it will make money by keeping part of the service fee, typically $4.95 or less, that consumers using MoneyPak pay at the point of sale. Banks issuing prepaid cards must provide to the networks specific bank identification numbers (BINs) so the cards can be reloaded. The first such issuer for rePower was Minneapolis-based Marshall BankFirst Corp., and Hynes says there are now more, though he says he can't yet disclose their identities. Full implementation of the rePower program across the Green Dot Network should be completed in the fourth quarter, according to Hynes. In all, Hynes expects rePower to have “somewhere north of 50,000 live locations” by year's end.