Green Dot Shows B2B, Banking as a Service Gain Ground

Dig a bit into earnings reports, and the numbers tell a tale.

Beyond the Wall Street focus on top and bottom lines, and the vagaries of stock trading, earnings calls and company supplementals give a sense of momentum, or lack thereof.

Within financial services, among the notable trends that have been part and parcel of the great digital shift — during the pandemic, yes, but likely to last well beyond that global event — has been the rise of Banking as a Service (BaaS).

For evidence of that, we can look at Green Dot’s earnings as a microcosm.

As reported Thursday (Nov. 4), the company’s total consolidated top line was up 18% year over year to $329 million.

Among the segment standouts was the B2B Services segment, where revenues in the latest quarter surged 53% year over year, to $118 million. The growth is, and has been, tied to partnerships with consumer and technology firms that in turn integrate with Green Dot’s banking (to enable consumer and small business checking accounts) and payroll platforms (for employers, where the company’s platform is known as Rapid). The company noted in its supplemental materials that its Paycard was up 20%, driven by new employers and a rebounding job market. Gross dollar volume was 57%, while purchase volumes gained 24% year on year to $2.2 billion.

During the conference call with analysts, CEO Dan Henry pointed to several recent integrations of banking and payment solutions. In one example, he noted, Green Dot is the banking service provider for Inuit’s Money by QuickBooks, which enables smaller firms to accept payments and pay bills.

In general comments, he said, “We anticipate continued scalable growth in years to come from our banking platform services business as we work closely with partners to roll out these innovative in-demand solutions that are designed for today’s small business owners and consumers.”

But beyond Green Dot, and as noted here previously, Banking as a Service is expected to become a $3.6 trillion industry by 2030. Roughly 42% of U.S. small and medium-sized businesses (SMBs) surveyed have observed their online transaction volumes increase during the pandemic. And nearly 70% of business buyers now expect their corporate purchasing to be “Amazon-like.”

Read also: New Study: SMBs Should Tap Banking-as-a-Service the Same Way B2Cs Did

Elsewhere, HSBC said late last month that it was debuting a BaaS platform that will “enable customers to create and provide business banking services through their own platforms,” in partnership cloud ERP system Oracle NetSuite.

Read more: HSBC Will Roll Out BaaS Platform

The partnership will allow NetSuite customers to automate accounts payable, accounts receivable and reconciliation processes, meaning it will be easier to pay bills, send invoices, get paid and see a full cash flow picture in a centralized location.