Wal-Mart Stores Inc.'s deal to distribute Green Dot Corp.'s mobile checking account, GoBank, signals a fundamental change in how both companies approach their audience.

The companies are longtime partners: Wal-Mart owns a 4% stake in Green Dot, and it used to exclusively distribute Green Dot cards; in recent years, it also helped test the prepaid issuer's new "Reload @ the Register" system and sold its store-branded GE Capital prepaid business to Green Dot. Their decision to launch GoBank at Wal-Mart stores next month is an admission that even with Wal-Mart's significant marketing and distribution power, prepaid cards will never appeal to every consumer they want to reach.

"Prepaid cards are just that: They are just cards that have a variety of uses ranging from casual engagements to more regular use," said Alok Desphande, chief product officer for Green Dot. "What we have found is customers looking for a checking account are looking for a longer-term relationship. With checking accounts people come in with higher expectations of a commitment, and are looking for a product that has full features."

For its part, Green Dot shed the gimmicky nature of its GoBank mobile checking account's fee structure.

The earliest version of GoBank, which Green Dot offered directly to consumers, didn't have a set monthly fee; instead, it had a "pay what you want" model, similar to how Radiohead sold its 2007 download-only album 'In Rainbows.' Consumers who signed up for GoBank before July 23, 2014 could choose to pay between $0 and $9 a month. 

The account now has an $8.95 monthly cost that is waived in any month with qualifying direct deposits totaling $500 or more. It has a "startup kit" fee of $2.95, a 3% foreign transaction fee and a $2.50 out of network ATM fee. The checking account, which is FDIC-insured, is linked to a MasterCard debit card and can be managed at Wal-Mart stores or on Apple and Android mobile devices.

Linking the monthly fees to direct deposits is a sign that Green Dot and Wal-Mart want to attract consumers who are in a better financial position than the unbanked who are the traditional audience for prepaid cards, said Richard Crone, a payments consultant.

"They are moving up the food chain," he said. "If someone can qualify for a direct deposit, they're a well-scored candidate for a traditional checking account."

But the product will be challenged when competing against established bank accounts, said Madeline Aufseeser, a senior analyst for Aite Group, who noted that between 80% and 90% of prepaid customers also have a checking account at a bank, according to Aite's research.

"I don't know if anybody is threatened by this. They're going head-on with traditional checking accounts and other prepaid companies," Aufseeser said. "The fact that it is with Wal-Mart helps Green Dot and the product itself, but I don't know if it offers anything new."

Paper checks will be available soon, and consumers can visit GoBank's website to sign up and be notified when checks are available. Consumers can also pay any company or person with GoBank's digital checkbook, which enables GoBank to mail a paper check to any recipient that doesn't accept e-payments. GoBank also offers mobile remote deposit capture, which lets users deposit checks by scanning them with a smartphone's camera.

Mobile technology will play a major role in the product's ultimate success, according to analysts.  The pact gives Wal-Mart a mobile checking product to compensate for its lacking support of Apple Pay and other emerging payment technologies.

Aufseeser and Crone see the Go Bank checking account as a way for Wal-Mart to boost the Merchant Customer Exchange, a multi-retailer initiative that is developing a cloud-based mobile wallet.

Green Dot would not comment on potential support for MCX, and Wal-Mart — which is also the exclusive seller of the Amex Bluebird card — did not provide an executive for an interview by deadline. 

Some saw Wal-Mart's 2012 launch of the Bluebird card, which is built on Amex's Serve platform, as a sign that "Wal-Mart took Green Dot off their Christmas card list," Crone said. The Bluebird partnership initially caused Green Dot's stock price to fall.

However, Amex says it does not feel threatened by the addition of GoBank to Wal-Mart's lineup.

The new account has “no impact on our relationship with Wal-Mart,” said Leigh Gerstner, an American Express spokesperson, in an email. "In fact, we continue to add new features to Bluebird in collaboration with Wal-Mart. This week, Wal-Mart incorporated Bluebird in a new promotion for its Savings Catcher campaign. It’s called 'Get 2X' and it allows Wal-Mart shoppers using Wal-Mart’s Savings Catcher (a price-matching tool) to double their savings with Bluebird."

Wal-Mart has additionally made a number of other moves to provide financial services, including an account-to-account service launched earlier this year.  

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