Green Dot announced an agreement Monday to purchase the owner of RushCard, the prepaid debit card that became embroiled in a payment processing fiasco in 2015.
Pasadena, Calif.-based Green Dot said that it will pay at least $167 million to buy UniRush LLC, though it also expects to realize approximately $44 million in offsetting tax benefits from the deal.
Cincinnati-based UniRush issues both RushCard and the Rapid PayCard, which thousands of companies use to distribute compensation to their employees.
Privately held UniRush sustained a blow to its reputation when many RushCard customers were unable to access their funds during a transition to a new payment processing platform. The firm eventually agreed to a $20.5 million settlement to resolve thousands of claims in a class-action lawsuit.
Green Dot said Monday that it will not be responsible for financial obligations incurred as a result of any future regulatory finding related to the 2015 incident.
Green Dot also said that it expects to add more than 750,000 new active cardholders as a result of the deal. The publicly traded company, which is one of the nation’s top issuers of prepaid cards, has a market capitalization of $1.35 billion.
UniRush as co-founded in 2003 by hip-hop impresario Russell Simmons.
In the press release announcing the sale, Simmons said: “As I have done with my ventures in music, comedy and fashion, I am partnering with the best company in the industry, Green Dot, to expand our opportunities and continue our mission to revolutionize the banking industry.”
