Walmart and Green Dot have extended their prepaid-card and banking relationship — but only through the end of 2015, which has some analysts worried, according to The Street.
Just over half of Green Dot’s revenue comes through Walmart, which sells the banking company’s prepaid cards. That used to be an exclusive deal, but now Walmart also offers prepaid cards from American Express and TSS’s NetSpend.
Green Dot is also the bank behind Walmart’s GoBank mobile checking account, which launched in October and is part of Walmart’s effort to move further into banking services. The retail giant has been blocked for decades from being allowed to get a banking license in the U.S. due to lobbying by major U.S. banks, although Walmart owns a bank in Mexico.
The previous deal between Green Dot and Walmart was due to expire in May 2015, and the short extension has rattled some investors. But JPMorgan analyst Tien-tsin Huang said in a note to investors on Tuesday (Dec. 23) that the two companies likely just need more time to reach a new deal. The extension also gives Green Dot more time to reduce its reliance on MoneyGram, the money transfer company that provides some Green Dot services.
But Deutsche Bank analyst Ashish Sabadra said the delay could be a sign that Walmart is considering another company to partner with for its financial offerings.