The company announced Tuesday (June 23) that its shareholders had approved the sale of Green Dot Bank to CommerceOne.
That sale is part of a larger process that involves CommerceOne forming a new publicly traded bank holding company that owns CommerceOne Bank and Green Dot Bank.
At the same time, private equity company Smith Ventures will acquire and privatize Green Dot’s non-bank FinTech business operating it as an independent FinTech, with Green Dot Bank will act as this business’ exclusive issuing bank.
More than 99% of GreenDot’s shareholders backed the deal, with 100% of CommerceOne shareholders issuing their support.
“We appreciate the strong vote of confidence from our shareholders,” said William I. Jacobs, Green Dot chairman and CEO.
“This milestone brings us closer to completing a transaction designed to unlock value for shareholders, enhance strategic focus, and position both the bank and fintech businesses for long-term success.”
Green Dot announced the sale last year, saying Smith Ventures would pay $690 million for its FinTech business.
The pending deal comes at a time when embedded finance is in a time of transition, as PYMNTS wrote earlier this year.
“Until recently, embedded finance — software that weaves payments, lending, digital wallets, insurance and other financial products into the platform of a retailer or other business that isn’t itself a bank — was defined by speed,” that report said.
Driven by the Silicon Valley philosophy of “move fast and break things,” embedded finance firms argued that the faster a nonbank company could provide financial services, the stronger its competitive advantage in the digital economy.
“Integrating embedded finance tools without hiccups or glitches promised growth, stickier customers likely to come back, and new revenue streams, often without the wait and hassles traditionally associated with dealing with a bank,” PYMNTS wrote. “Now come the brakes and cruise control in a global market expected to top $7.2 trillion by 2030.”
Recent research from PYMNTS Intelligence produced in partnership with Green Dot indicates that embedded finance is shifting into a more disciplined stage driven not by how fast a retailer can introduce new financial products, but by how much it trusts the technology company offering those products, as well as the compatibility and operational rigor of its tools.
