Green Dot's profits surge on higher swipe fees, purchase volume
Green Dot posted double-digit earnings growth in the fourth quarter, as the company generated more revenue from users of its prepaid cards.
The Pasadena, Calif.-based company reported net income on Wednesday of $14.3 million, up 17% from the same period a year earlier. Total operating revenues were $237.8 million, up 12% from the fourth quarter of 2017.
The results suggest that consumers who buy Green Dot cards are using them with greater frequency or for longer periods of time than they have in the past.
The company has long been looking for ways to persuade consumers not to discard disposable prepaid cards quickly. For example, users who have their paychecks deposited directly onto a prepaid card are likely to keep the cards longer and use them more often to make purchases.
At the end of 2018, Green Dot reported 5.34 active accounts, which was up less than 1% from a year earlier. But purchase volume on Green Dot cards rose by 11% to $6.28 billion, and revenue from interchange fees was up by 9% to $75.2 million.
Meanwhile, total operating expenses increased by nearly 10%, as the company plowed more money into sales and marketing, as well as other administrative expenses.
Green Dot CEO Steve Streit said in a press release that the company has been making material investments in its operating platform and a road map for future innovations.
The company, once a pioneer in prepaid debit cards, now also provides technology for mobile phone-based accounts such as Apple Cash.