Prepaid card provider Green Dot Corp. plans to offer prepaid cards to college students without bank accounts in an agreement with student lender Salle Mae. The move is a continuation of Green Dot’s strategy of diversifying its market segments.
“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.
While the agreement offers a new distribution channel for Green Dot, it remains to be seen whether there are many students who do not have bank accounts of their own. After having to deal with issues like financial aid, students gain a level of sophistication about their money. That said, having a bank account does not prevent someone from using a prepaid card, and students may find that the cards are a way to establish their independence from accounts opened at their parents’ banks perhaps in cities far away from their campuses.
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