Kmart's new reloadable prepaid debit card will do double duty for both the mega-retailer and Green Dot Corp., which provides the card.

Kmart's Halogen Reloadable Prepaid MasterCard is the latest in Kmart's expanding array of financial services. The card, announced July 17, targets consumers seeking alternatives to traditional financial services.

For Green Dot, the Kmart connection expands the prepaid marketer's mass-merchant reach, lessening its dependence on Wal-Mart Stores Inc.

Green Dot's heavy dependence on Wal-Mart to sell its products has recently become a source of criticism in the investment community, Ben Jackson, a senior analyst with Mercator Advisory Group, says.

"Green Dot's partnership with Wal-Mart is obviously a big deal, but what is seen as a strength is also a weakness, because if they were to lose that deal with Wal-Mart, they would lose more than half of their retail distribution channel," Jackson says.

Inking a new card deal with Kmart, which has 1,200 stores, including many in urban locations where Wal-Mart has struggled, works well for both Kmart and Green Dot, he says.

"Kmart has a population that is receptive to using prepaid cards as alternatives to banks, and their locations in urban centers are a good offset to Wal-Mart's," Jackson says.

Kostas Sgoutas, chief revenue officer for Green Dot, said in an email that "by adding new partnerships we're creating broader awareness and acceptance on the benefits of prepaid, which is beneficial our partners across the board."

Though there has been recent pressure on prepaid cards' monthly fees, the Halogen card keeps standard monthly fees of $5.95, which can be waived based on how much money a user loads or how many times the card is used in a month. The card also has a fee for reloads.

Halogen's selling point may instead be ATM access. Even American Express' low-cost prepaid card, which does not charge monthly or reload fees, offers only one free ATM withdrawal a month. Subsequent withdrawals cost $2.00 each.

Kmart's card lets users make free withdrawals at MoneyPass ATMs. This gives it a "pretty broad reach for free ATM withdrawals inside Kmart and at MoneyPass locations across the U.S.," Shannelle Armstrong, spokeswoman for Kmart parent Sears Holdings, said.

Keith Brand, vice president of alternative financial services for Kmart parent Sears Holding Corp., in May said the company planned this year to beef up Kmart's prepaid card offerings.

Hoffman Estates, Ill.-based Kmart at that time had added its own walk-in bill-pay service, undercutting Wal-Mart's pricing on certain similar services.

The Halogen prepaid card's features are otherwise typical. The card is free if consumers order it through Kmart's website; otherwise the card costs $3.95. Cash reloads are $3.95 each inside Kmart stores. Halogen cardholders may also reload cards with a Green Dot MoneyPak.

The card's monthly fee is waived if customers load at least $1,000 onto the card monthly, including via direct deposit; the fee can also be waived if consumers use the card for at least 30 purchases each month.

Synovus Bank and Green Dot are both listed as issuers of Kmart's Halogen card.

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