MONROVIA, Calif.--(BUSINESS WIRE)--Green Dot Corporation (NYSE: GDOT), a provider of widely distributed, low cost banking and payment solutions to a broad base of U.S. consumers, has acquired certain processing and hardware assets of eCommLink (ECL) for $2.5 million in cash. This asset purchase will allow Green Dot to continue its strategy of vertical integration by bringing key remaining elements of transaction processing in house, thereby reducing reliance on third parties.
Green Dot currently uses TSYS for portions of its transaction processing and payment network connectivity. Green Dot recently renewed its outsourced processing agreement with TSYS for an additional two-year term. During this period, Green Dot expects to transition those services from TSYS to its in-house processing solution built on the assets acquired from ECL. A dedicated internal team will perform the processing conversion, led by John MacIlwaine, Green Dot’s Chief Information Officer.
"Bringing key remaining elements of our transaction processing engine in-house through this asset purchase builds upon our recent bank acquisition, furthering our overall strategy to vertically integrate the platform. Through this series of actions, Green Dot expects to benefit from faster speed to market for product development, more flexibility in serving its customers, and reduced operational expenses," said Steve Streit, Green Dot Chairman and Chief Executive Officer.
“Approximately one-third of Green Dot’s total processing expenses consists of fees paid to payment processors like TSYS and to Synovus, one of our issuing bank partners. We expect that integrating our recent acquisitions of Bonneville Bancorp and the assets of ECL will enable us to implement our vertical integration strategy over the next two years as we build out our own in-house card issuing and processing capabilities,” added John Keatley, Green Dot’s Chief Financial Officer.
Green Dot will share more details about its overall vertical integration strategy with analysts and investors during its conference call to discuss 4Q results on January 26 at 5pm ET.
About Green Dot
Green Dot is a publicly traded (NYSE:GDOT) bank holding company regulated by the Board of Governors of the Federal Reserve System. The Company provides widely distributed, low cost banking and payment solutions to a broad base of U.S. consumers. Green Dot's products and services include its market leading category of General Purpose Reloadable (GPR) prepaid cards and its industry-leading cash transfer network which are available directly to consumers online and through a network of approximately 58,000 retail stores nationwide where 95% of Americans shop. Green Dot is headquartered in the greater Los Angeles area. For more details, visit www.greendot.com.
This press release contains forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding cost savings from Green Dot’s recent acquisitions. Actual results may differ materially from those contained in the forward-looking statements contained in this press release. A wide-variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results expressed or implied by Green Dot's forward-looking statements, including among others: Green Dot’s limited experience with acquiring companies and technologies, potential difficulties in integrating operations of acquired companies and acquired technologies, any unexpected delays in Green Dot’s development of its card issuing and processing capabilities and any unexpected increases in Green Dot’s other operating expenses. Additional risks and uncertainties are detailed in Green Dot’s filings with the Securities and Exchange Commission, including its quarterly report on Form 10-Q, which is available on Green Dot’s investor relations website at ir.greendot.com and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of November 23, 2011, and Green Dot assumes no obligation to update this information as a result of future events or developments.