Green Dot Corp. has signed an agreement with the authentication service provider CardinalCommerce Corp. that it expects to significantly boost online acceptance of its prepaid cards.
Steven Streit, Green Dot's president and chief executive, said in an interview Tuesday that about 25 merchants accept the Monrovia, Calif., company's MoneyPak product on their Web sites but that adding new ones can be difficult because updating their payments systems is time-consuming.
CardinalCommerce, a Mentor, Ohio, authentication service provider, has relationships with more than 29,000 merchants that could choose to accept MoneyPak. Mr. Streit said that new merchant customers can be connected to Cardinal's payment system faster than to MoneyPak.
Matt McDowell, a CardinalCommerce spokesman, said the agreement "offers an alternative payment method and alternative plans are booming with our merchant clients."
Cardinal can connect its merchants to the Green Dot network by updating its Cardinal Centinel software, Mr. McDowell said.
Merchants can pay a one-time fee for the update or a monthly fee for the ability to accept MoneyPak.
Mr. Streit said the deal will enable the unbanked and underbanked to shop online more easily.
MoneyPak appeals to merchants because they do not have to pay an interchange fee to accept payments through it. Consumers, however, must pay a $4.95 fee to load funds, which they can do at merchants such as Rite Aid Corp., CVS Inc., Walgreen Co., and RadioShack Corp. They can load from $20 to $500. Though some of Green Dot's products can be reloaded, and the company operates its own reload network to handle these transactions, MoneyPak cannot be reloaded.
Cardinal's merchant clients include Sky Miles; Travelocity.com; the camera retailer Ritz Interactive Inc.; and TigerDirect Inc., an online electronics store.
Green Dot is best known for its prepaid products, but in November it began testing credit cards, which it is selling through some merchants. Consumers pay $19.95 for the cards, with a credit line of up to $200, and must prove their identity. The company said in February that it would extend the program.
"The pilot program continues to work well," Mr. Streit said on Tuesday.
Gwenn Bezard, a research director at Aite Group LLC in Boston, said that gaining access to more online merchants will appeal to Green Dot's unbanked customers. Offering multiple payments capabilities will build a "deeper relationship" and loyalty, he said. "MoneyPak is like a bank account."
