Green Dot is known for issuing prepaid cards and providing banking as a service to companies like Uber and Apple. Now the company is leaning on its banking charter to launch its own digital bank.
GO2bank, which made its debut Wednesday, offers checking and savings accounts through a mobile app. It offers customers a 1% interest rate on savings of up to $5,000 and up to 7% cash back when buying electronic gift cards in the app from merchants including Domino’s and Old Navy. Users can receive their paychecks two days early and government benefits up to four days early, and obtain a secured credit card to help them build credit. Overdraft protection is tiered, with customers accessing $200 in protection if they have received two direct deposits totaling $400 in the previous month. There are no fees if the customer cures the overdraft within 24 hours.
The Pasadena, Calif., company
“Green Dot has introduced a lot of products over the years that aim to solve meaningful financial challenges for people, but didn’t necessarily work together and weren’t designed with a long-term strategy and community in mind,”
Unlike most challenger banks, GO2bank charges a $5 monthly fee. This fee is waived if the customer sets up direct deposit.
“We know through extensive research that our target customers understand total value and are open to paying a small fee for the right set of tools and features built around their needs,” Henry said.
Henry said Green Dot's bank charter, which it acquired in 2011, puts the company in a strong position to offer banking services.
“It is our long-term vision and strategy to offer customers a safe and seamless ecosystem to manage their money, build savings, establish credit, and ultimately expand their access to financial services like loans and other products that help them build a stronger financial foundation for the future,” he said.
