Green Dot has acquired the software and hardware assets of eCommLink for $2.5 million in cash:
“MONROVIA, Calif.–(BUSINESS WIRE)–Jan. 24, 2012– 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.”
This means that over the next two years Green Dot will begin to phase out its reliance on TSYS for network connection, transaction processing, and settlement functions:
“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.”
Bank fees and processing fees to TSYS represents one-third of Green Dot’s total processing costs:
“ ‘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.”