Shares of prepaid debit card issuer Green Dot Corp. nosedived Monday after Wal-Mart Stores Inc. announced a partnership with American Express Co. to launch a competing prepaid product.
The deal represents a significant competitive threat for Monrovia-based Green Dot, which gets nearly two-thirds of its revenue from cards sold at Wal-Mart.
Under the deal, American Express’ Bluebird card will be sold at more than 4,000 Wal-Mart locations beginning next week. The cards were first sold under a pilot program launched late last year.
Shares of Green Dot, the nation’s largest prepaid debit card issuer, closed down $2.60, or 20 percent, to $10.25 on the New York Stock Exchange. The company’s stock was already heading down: Today’s plunge brings the total decline for this year to 68 percent.
Steve Streit, Green Dot’s chief executive, said in a statement that American Express prepaid cards “attract a different customer segment” than Green Dot’s products, which are popular with the unbanked population.
“We have a great partnership with Wal-Mart and are fully supportive of their focus on offering various alternative financial solutions for different segments of Americans looking for better ways to manage their finances,” he said. “We will continue working together to grow our MoneyCard business, which we believe will continue to thrive alongside this new offering.”