Green Dot Makes Waves With GoBank

Navigator Edition: January/February 2013
By: Josh Gilbert and Sarah McCroy

Many wondered about Green Dot’s long term plans when it purchased Bonneville Bank last year.  The obvious answer to that question was to further its vertical integration in the delivery of its flagship GPR product.  However, Green Dot clearly had bigger things in mind as witnessed by the January 15th introduction of GoBank.  This FDIC-insured bank account is notable in that sales, distribution, and servicing are accomplished primarily through the mobile channel, although web access is also available.  The account provides the expected features of a bank account (debit card, ATM access, bill payment), but also offers more mobile-specific functionality including:

  • Mobile remote deposit capture
  • P2P payments via email, text, and Facebook messages
  • Mobile bill pay
  • Online checkbook

None of these individual features are ground breaking, but GoBank stands out in its seemless integration within a user-friendly mobile app.  The other prominent feature of GoBank is its price.  Customers are able to self-select their monthly membership fee, which ranges from free to $9.  This novel approach, which Green Dot states tested well in research, is selected on a monthly basis by the consumer through the app.  The desired intent is for consumers to be delighted with the Bank’s service and choose to pay for it rather than setting a standard fee that may deter adoption.  Early users of GoBank will have their monthly fees set to $0 as a default.  Other, market standard ancillary fees apply to the account.

For Green Dot, GoBank represents a significant bet on mobile.  The technology powering the product was developed in-house, leveraging the capabilities obtained with the Loopt acquisition in March 2012.  By adding flexibility with many self-service options, the product targets a younger, mobile-centric generation keen on technology and usability.  The company is counting on the innovative design and pricing approach to attract a customer base that does not quite fit into a GPR card, but may be wary about beginning a relationship with a bank.

Green Dot clearly has a lot riding on the success of GoBank.  The company’s stock price has stumbled as competition has increased in GPR.  Further, the company has seen its primary partner, Walmart, diversify its financial services business with the launch of the Bluebird product with American Express.  Regardless of the outcome, Green Dot has provided the industry with a bold vision of what the conversion of mobile and banking could be.

For more information, please contact Josh Gilbert, Principal specializing in Deposit Access and Payment Strategy,; or Sarah McCroy, Analyst specializing in Deposit Access and Payment Strategy,

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