Digital Transactions Authoritative, insightful and timely information for payments professionals
Prepaid card program manager Green Dot Corp. reported higher purchase volumes and card numbers in the first quarter while merchant acquirer CardConnect Corp. posted a 23% increase in bank card dollar volume.
Purchase volumes on Pasadena, Calif.-based Green Dot’s cards totaled $5.5 billion, up 17% from $4.71 billion in 2016’s first quarter, the company reported late Tuesday. The active card count grew 6% to 5.05 million from 4.75 million a year ago.
Green Dot’s total operating revenues rose 11% to $253 million. As a card issuer with its own bank, Green Dot gets interchange income, which totaled $61.4 million in the first quarter, up 11% from a year earlier.
Also boosting revenues was a Green Dot’s tax-refund processing subsidiary, Green Dot TPG, which processed 8.6 million refunds in the quarter, up 5% from 8.18 million a year earlier. TPG last year processed 78% of its 10.5 million refunds in the first quarter.
Green Dot reported net income of $40.8 million, up 24% from $32.9 million a year earlier. In a research report issued Wednesday, Chicago-based investment firm William Blair & Co. noted that revenue per quarter has risen for eight consecutive quarters. The report also noted that Green Dot’s recent acquisition of prepaid card provider UniRush LLC Net revenues, excluding interchange, debit network fees, and other pass-through items, rose 19% to $41.1 million from $34.4 million in the prior-year period. The company posted a net loss of $2.65 million compared with net income $923,000 in 2016’s first quarter, in part because of a big increase in interest expense.
Green Dot is emerging from a protracted fight, now resolved, with a hedge fund that owns 9% of the company and nearly cost chief executive Steve Streit his job, as well as the discontinuance of its original MoneyPak product, which proved to be popular with fraudsters. Green Dot has since introduced a new MoneyPak.
Meanwhile, King of Prussia, Pa.-based CardConnect on Wednesday said it processed $6 billion in bank card volume in the first quarter, up 23% from $4.9 billion a year earlier. Net revenues, excluding interchange, debit network fees, and other pass-through items, rose 19% to $41.1 million from $34.4 million in the prior-year period. The company posted a net loss of $2.65 million compared with net income $923,000 in 2016’s first quarter, in part because of a big increase in interest expense.
In April, CardConnect acquired MertzCo Inc., its largest value-added reseller and whose merchants generated $1.5 billion in transaction volume in 2016. CardConnect named Michael J. Mertz, MertzCo’s chief executive and sole stockholder, as its chief sales officer.
