This article adds information to an initial story that ran Jan. 27.

Green Dot Corp., having been allowed into the ranks of mainstream banks, already is planning its next effort to compete with them.

The prepaid card company will introduce a bank account with a traditional debit card attached to it sometime this year, chief executive Steve Streit said in an interview Jan. 26.

Until now, Green Dot has only sold prepaid cards, which can be used without access to traditional bank accounts, and related services. But its new product could set the Monrovia, Calif.-based company apart from its main prepaid competitors and increase its ability to challenge big banks for some of their customers.

"They have an opportunity to be a low-end disruptor to the bank system," says Wedbush Securities analyst Gil B. Luria.

There are some startups with similar ambitions to get into traditional banking, such as BankSimple and PerkStreet Financial Inc., but "they usually have to rely on other banks to issue their cards, and they don't necessarily have the ability to have broad distribution," Luria says.

"Green Dot has the scale, it has a bank charter, it has the resources to promote this. It has distribution online. It has distribution through retail," he adds.

Most prepaid card distributors rely on third-party agreements with banks and retailers to distribute their cards and process their payments. But selling its own traditional account is newly possible for Green Dot, which at the end of 2011 received the first-ever regulatory blessing for a prepaid marketer to buy a bank. Its $15.7 million acquisition of Bonneville Bancorp in Provo, Utah, closed in December (see story).

Streit would not discuss further details of the planned bank account, including when Green Dot will launch it. He said Green Dot is still hashing those details out with regulators.

His decision to mention the product before gaining regulatory clearance to launch it raised some eyebrows among analysts.

"Green Dot is a brilliant marketer that is going to need to adjust to being a bank holding company," payments consultant Philip Philliou said in an email.

Streit spoke during the interview after Green Dot reported fourth-quarter earnings. The company's profit rose from a year earlier, but its revenues were lower than analysts on average had anticipated.

Green Dot executives said they had overestimated the business they would get from customers who received tax refunds on prepaid cards.

"We misjudged the retention of cards acquired by customers getting tax refunds," John L. Keatley, Green Dot's chief financial officer, told analysts during a conference call on Thursday afternoon.

Individuals who were late filing their tax returns received their refunds on prepaid cards in the fall, but many of them immediately withdrew the funds at ATMs and did not continue using the cards, Streit said in the interview.

Green Dot reported its earnings at a time of high scrutiny on the fees prepaid companies charge and increasing pressure from competitors to cut them.

Russell Simmons' UniRush LLC said on Jan. 26 that it was eliminating and lowering a string of fees on its RushCard products (see story).  That decision came after finance guru Suze Orman came under some fire this month for introducing a prepaid card of her own (see story).

Streit declined to say in the interview whether Green Dot plans to lower fees. But during the call with analysts, he had some criticisms for his competitors.

"There is the RushCard announcement today–that is more expensive than Green Dot," Streit said. "There is the Suze Orman card. I would never want to pique the ire of a consumer advocate, but there are a lot of fees on there that we would never charge, and the card itself would certainly not rank among the lowest priced cards on the market by a long shot."

Orman's Approved Card comes with a $3 activation fee, and a $3 monthly fee, which is waived for the first month. It also charges users $2 per ATM withdrawal, though some of those fees can be waived if the customer makes a direct deposit or bank transfer onto the card.

Green Dot's retailer partners typically charge up to $4.95 to sell the card, and Green Dot charges a $5.95 monthly fee that is waived if the user loads $1,000 or makes at least 30 purchases a month. The card can be ordered for free online at Green Dot's web site.

Under the RushCard's new RushUnlimited Plan, which will be available in March, customers will be able to make unlimited transactions for a monthly fee. Users who use direct deposit will be charged $5.95 a month, while others will pay $7.95.

Representatives for Suze Orman and RushCard did not immediately respond for requests for comment on Jan. 27.

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