GreenDot Aims to Take on Banks with Mobile-Based Account

Green Dot, the provider of prepaid debit cards sold by Wal-Mart Stores, pharmacies and other retailers, is aiming to take on big banks with a new checking account that consumers can open and manage through a smartphone application.

The GoBank account is a departure for Green Dot, which is trying to branch out beyond so-called underbanked consumers, currently the company’s¬†primary market.

It is doing so at a time when it faces intense competition from large lenders like J.P. Morgan Chase and American Express which have rolled out their own prepaid cards.

Green Dot is trying to cast a wider net by going after consumers who are dissatisfied with their traditional bank accounts as well as younger, tech-savvy consumers who constantly use mobile phones, thanks largely to social-networking apps.

Initially released as a beta trial, the GoBank account will include a main deposit account linked to a Visa branded debit card that can be used to make purchases online and in stores. The main account doesn’t come with paper checks, though customers can use the GoBank app to pay bills for which Green Dot will issue a check on their behalf.

Story by Andrew Johnson for the Wall Street Journal.

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