To make up for some of the shelf space it could soon be losing at big-box retailers, Green Dot is partnering with student lender Sallie Mae to market a prepaid card to students who do not have a traditional bank account.
Under the arrangement, any funds left over from a Sallie Mae-issued student loan will be loaded onto Green Dot's My Flex prepaid card that students can then use to cover the cost of books and other expenses.
Green Dot hinted at the partnership on its latest earnings call with investors in July.
"We think that Green Dot is really well positioned to succeed in the higher education channel because we intend to offer feature-rich product with fees that are at the lowest end of the market, along with our company policy of never having any type of overdraft or penalty fees ever," said Green Dot's chief executive Steve Streit, on the second-quarter earnings call.
At the time, Streit said, he could not disclose the name of that partner.
Indeed, Streit said on the call that the company could eventually build relationships with students that could have them opening up Green Dot Bank accounts.
Late last year, Green Dot received regulatory approval buy Bonneville Bancorp in Provo, Utah. About a month later, the company said it was going to offer bank accounts with traditional debit cards to customers.
Green Dot is eyeing new sources of revenue following its recent disclosure that it could soon lose its exclusive agreements with some big-name retailers.
Recently, Green Dot lowered its year-end revenue forecast by about 9%, to a range of $534 million to $543 million, and reduced its earnings-per-share projections from a range of $1.65 to $1.70 to a range of $1.29 to $1.32.
Green Dot's shares closed at $11.11 Wednesday, up 10.6% for the day, but still down about 83% from its all-time high set in early 2011.