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Green Dot Corp.’s new chief executive, Dan Henry, made no bones earlier this month about the strategic importance of the company’s bank, and now a new banking-as-a-service program from the Pasadena, Calif.-based company shows how that asset can be deployed to win the loyalty of one of America’s largest immigrant communities.
Green Dot will provide a bank account and Visa debit card linked to a mobile platform from Los Angeles-based Welcome Technologies Inc., which serves some 2 million active users. To begin with, the bank account, branded PODERcard after the associated card, will be aimed at the nation’s Hispanic community (“poder” means “power” in English). Features include a Spanish/English interface and no monthly fees or required minimums. The Visa card carries no fees and allows free access to more than 19,000 ATMs, the companies said.
“The PODERcard is more than just a debit card or mobile bank account, it’s one of the first of many steps our users will take to secure a more financially stable future for themselves and their families,” Amir Hemmat, chief executive of Welcome Technologies, in a statement. “We are challenging the status quo to ensure immigrant communities get fair and secure financial options.” Welcome’s technology is designed to link newcomers in a country to products and services aimed at easing their ability to function in their new surroundings. The company estimates there are 57 million Hispanics living in the United States, accounting for 57% of the country’s population growth.
Green Dot’s BaaS service relies on a Provo, Utah-based bank it acquired in 2010, which allows the company to offer bank-account and related services directly in competition with companies, often called challenger banks, that often don’t own the banks they rely on. Clients for the service include major companies like Apple Inc. and Uber Technologies Inc.
With growing immigrant communities, the company clearly sees a market ripe for this approach. “We are excited to partner with Welcome Technologies to reach this important and underserved community,” said Seth Ross, chief of enterprise partnerships at Green Dot, in a statement. “Many families who are new to the United States have trouble accessing basic banking services, and we’re looking forward to helping those families enter the mainstream financial system.”
But observers say the move to bring digital financial services to immigrants can be a tricky proposition. “This can be a complicated market,” says Ben Jackson, chief operating officer at the Innovative Payments Association. “Immigrants often want to assimilate,” he says, without being treated as if they were a separate part of the population. “This can be a tough balance to walk,” says Jackson. “Welcome Tech will have to sort that part out.”
Still, Jackson likes the combined product as a practical proposition. “This is an example of how BaaS can create something that can cater to an audience’s particular needs,” he notes.
The move to link with Welcome Technologies follows news earlier this week of revamped features, including a 2% savings rate, for the Walmart MoneyCard, which Green Dot issues.
