Green Dot Corporation, a provider of widely distributed, low cost banking and payment solutions to a broad base of U.S. consumers, has acquired certain processing and hardware assets of eCommLink (ECL) for $2.5 million in cash.
This asset purchase will allow Green Dot to continue its strategy of vertical integration by bringing key remaining elements of transaction processing in house, thereby reducing reliance on third parties.
Green Dot currently uses TSYS for portions of its transaction processing and payment network connectivity. Green Dot recently renewed its outsourced processing agreement with TSYS for an additional two-year term. During this period, Green Dot expects to transition those services from TSYS to its in-house processing solution built on the assets acquired from ECL. A dedicated internal team will perform the processing conversion, led by John MacIlwaine, Green Dot's Chief Information Officer.
"Bringing key remaining elements of our transaction processing engine in-house through this asset purchase builds upon our recent bank acquisition, furthering our overall strategy to vertically integrate the platform. Through this series of actions, Green Dot expects to benefit from faster speed to market for product development, more flexibility in serving its customers, and reduced operational expenses," said Steve Streit, Green Dot Chairman and Chief Executive Officer.
"Approximately one-third of Green Dot's total processing expenses consists of fees paid to payment processors like TSYS and to Synovus, one of our issuing bank partners. We expect that integrating our recent acquisitions of Bonneville Bancorp and the assets of ECL will enable us to implement our vertical integration strategy over the next two years as we build out our own in-house card issuing and processing capabilities," added John Keatley, Green Dot's Chief Financial Officer.
Green Dot will share more details about its overall vertical integration strategy with analysts and investors during its conference call to discuss 4Q results on January 26 at 5pm ET.