Green Dot launches Go2bank, its in-house challenger bank
- Green Dot is best known for its prepaid cards and managed debit card programs its managed for big brands.
- The bank has launched its own challenger bank brand to compete head on in digital banking.
Green Dot today announced the launch of Go2bank, a new mobile bank designed to help the two in three Americans living paycheck to paycheck.
Green Dot aims to build upon its 20-year history serving more than 33 million customers through its retail and direct-to-consumer debit card products. It's also known for its banking as a service platform and debit card programs it's managed for other brands like Apple, Walmart, Intuit, Amazon and Uber.
Now, with Go2bank, Green Dot is going head to head with challenger banks like Chime by focusing on what today's customers really want: help. Approximately 7.1 million, or 5.4% of U.S. households, were unbanked in 2019, and nearly 12 percent utilized expensive methods like check cashers, money orders and bill pay services to access the cash they need. Go2bank addresses these consumers' needs with overdraft protection, a rewards program, high interest savings, and credit building.
“Too many Americans struggle to access their money, are paying too much for financial products, and are negatively impacted by the lack of solutions designed to suit their needs,” said Dan Henry, CEO of Green Dot. “Go2bank is built to be the go-to destination for seamless, affordable, useful banking – combining the security, stability, and experience of an FDIC-insured bank with the innovation and agility of a leading fintech.”
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Green Dot's experience in financial products enabled it to examine what it wanted its challenger bank to be. To build Go2bank, the company turned to customers to really understand what they wanted in a primary bank account, according to Abhijit Chaudhary, general manager of Green Dot's direct to consumer products. "We have the pulse of America, we know what our customers want, and we spent a lot of time trying to understand how Americans spend, what their needs are and how we could cater to them," he said.
The product team learned that overdraft protection was one thing that was really important to many Americans hit hard by the pandemic. It's expensive to be lower income in America and many banks charge around $35 when customers go into the red. Go2bank offers up to $200 of protection when customers make multiple direct deposits within a 35 day period. Go2bank gives customers 24 hours to cover their overdraft for free to avoid a $15 fee.
Many overdraft programs are complicated and obfuscate their real qualifications, according to Chaudhary. "Everyone has made it so complicated to understand, like there's some magic algorithm -- we made it easy for our customers," he said.
Early wage access is also a core part of Go2bank's offering. Users can access their pay up to two days early or receive government benefits up to four days early.
Go2bank works with Plaid to remove some of the friction around customers setting up direct deposit on their salaries. Its ASAP Direct Deposit feature connects to some of the major payroll providers to make it easy to route a paycheck into a user's bank account.
Green Dot used three core customer personas when building its challenger bank. These personas guided product development, according to Green Dot's head of direct to consumer banking products, Bill Coats.
One persona, Ana, represents 60% of Green Dot's customer base who are women. Ana can be a mother who's living paycheck to paycheck and conducts a lot of transactions in cash. Green Dot's retail network of 90,000 points of presence enable customers like Ana to make deposits and withdrawals in retail stores using app-generated, one time use bar codes. That puts Green Dot locations within 3 miles of 95% of people in the U.S.
Customers like Ana also frequently lack substantial credit history. Go2bank's Secured Credit Card is available with no credit check or annual fee, so customers can establish and build credit, regardless of their credit history. Go2bank clients can receive a secured credit card in addition to their debit card. Credit lines begin at $100 on the secured credit card.
"Building credit can be a rocky road for many in this demographic," said Coats. "Our Secured Credit Card provides an easy way to apply within our mobile app, repayments are reported out to the three major credit bureaus, and you see changes to your Equifax credit score every time you log in."
Green Dot has historically managed a few different brands around a few different banking products, including GoBank and Unlimited, launched last year. Its new executive team, led by Henry, wanted to create a new product that obviates the need to create a new product every couple of years.
Chaudhary emphasized that Go2banking doesn't replace anything. It's intended to be a full banking solution for Green Dot's target banking demographic.
"We’ll keep adding new features to our existing product, creating a banking ecosystem, and empowering our customers with new features. Go2Bank will be our marquee product going into the future," he said.
A new multi-channel national advertising campaign promotes GO2bank across two unique television spots, a new website, digital advertising, social media, and direct mail.