Prepaid card provider Green Dot Corp. recently announced their acquisition of Loopt, a location-based mobile app, for $43.4 million. Green Dot said that purchasing Loopt, with several relevant patents, will provide the opportunity for them to become a leader in mobile wallets.
Green Dot is most known for their Visa and MasterCard GPR (General Purpose Reloadable) prepaid cards which are sold online and in many retail locations. When announcing the acquisition of Loopt, a mobile app, Green Dot made it clear they are planning a mobile wallet. Green Dot stated three motivations behind the deal: improving customer acquisition and retention of current prepaid products, driving adoption of new banking and payment products, and to provide the opportunity to become a leader in mobile wallets, rewards and payment solutions.
Loopt provides location-based services through a mobile app on iPhone, Android, Windows Phone and BlackBerry devices. Their 5 million registered users can view near-by locations, create and read reviews as well as be sent coupons and offers. They also deliver location-based advertising to mobile devices. Green Dot will be winding down the Loopt app and services, but many of their platforms and capabilities are directly useful for a mobile wallet. Being able to search for merchants or restaurants based on current location, delivering deals or offers and delivering mobile advertisements are all features that can be integrated with a mobile wallet. Green Dot is also gaining several Loopt patents relevant to mobile marketing and location-based message delivery.
Green Dot will be offering a mobile wallet at some time in the future and said they will provide more information about their mobile strategy during their first quarter earnings call in late April. They will be competing against Google Wallet, the Isis mobile wallet, PayPal, Visa’s mobile wallet and others in what may already be a crowded arena. Green Dot, however, has built a rapport with unbanked and underbanked consumer groups which could help them develop a user base.
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