Green Dot Corp. on Tuesday launched a long-anticipated foray into banking, announcing what it called first bank account designed from scratch to be used on a mobile device.
The Monrovia company said its GoBank is a new type of checking account that consumers can open and manage through an iPhone, iPod Touch, Android app or a computer.
“Until now, banking is one of the few industries in the world that hasn't yet been reinvented by Silicon Valley,” Chief Executive Steve Streit said in a statement. “GoBank is designed from the ground up to be the bank account for the smartphone generation.”
The expansion into online banking comes as Green Dot has faced erosion of its dominant position in the prepaid debit card market due to a growing number of competitors. Even Wal-Mart Stores Inc., a Green Dot investor, recently made a partnership with American Express to offer a prepaid card.
GoBank accounts include a federally insured main deposit account linked to a Visa-branded debit card. The account doesn't include paper checks but customers can use the app to pay bills, and Green Dot will issue a check if necessary. Customer also receive a separate deposit account that can be used for savings. The company said monthly costs will be competitive with brick-and-mortar banks, and include some personal finance features such as a “Fortune Teller” budget alert that provides irreverent warnings if the customer tries to spend beyond certain limits.
GoBank should enable Green Dot to expand its core audience beyond so-called underbanked consumers who lacked traditional accounts but needed a way to make electronic transactions. The company’s new business was made possible by its 2011 acquisition of Bonneville Bancorp, a small Utah bank holding company, and last year’s purchase of Loopt, a mobile location-based app developer.
Green Dot shares closed up 61 cents, or 4.4 percent, to $14.36 on the New York Stock Exchange.