Green Dot and Walmart are getting back together. In March, there was talk about the partnership coming to an end, but it seems the pair has finally found common ground to work on.
Yesterday, the prepaid card giant announced that it entered into a new, long-term agreement for the next five years with Walmart whereby Green Dot Corporation and Green Dot Bank will continue to serve as the program manager and issuing bank for the Walmart MoneyCard suite of prepaid reloadable debit card products.
This is very good news for Green Dot, which in 2013 relied on Walmart for 64 percent of its total operating revenues and more than 82 percent of its total units sold. Its stock soared yesterday following the announcement by 21 percent. And according to Reuters, Green Dot separately said it authorized a share buyback program of up to $150 million.
Steve Streit, Founder, Chairman and CEO of Green Dot Corporation, stated, “We are so very proud to serve Walmart and the many millions of Americans who rely on Walmart for low prices on the products and services they want and need. We launched the MoneyCard program with Walmart in 2007, and today it remains the largest and most prestigious General Purpose Reloadable prepaid card program in America. To be chosen again as Walmart’s partner against a wide field of fine competitors brings a wonderful feeling of accomplishment and satisfaction for all of us at Green Dot Corporation who work so hard on behalf of our customers, our business partners and our investors."
The new term has an effective start date of May 1, 2015 and will replace the current agreement, which would have otherwise expired at the end of this year. In fact, while Green Dot had secured a one-year extension with Walmart in 2014, at that time the future looked bleak. Rumors even had it that competitor American Express was a possible alternative to the prepaid card giant. It is not clear from the press release what Green Dot had to let go of in exchange for the renewal of the agreement.
Meanwhile, the prepaid card giant was busy striking a deal with MasterCard, naming it as its exclusive transaction processor and network gateway for all deposit accounts, including the bank’s debit card products.