Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7380
    -0.0006 (-0.09%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • Bitcoin CAD

    94,559.48
    -1,117.99 (-1.17%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ

    16,379.46
    -20.06 (-0.12%)
     
  • VOLATILITY

    13.01
    0.00 (0.00%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • CAD/EUR

    0.6844
    +0.0001 (+0.01%)
     

Green Dot tops Q1 expectations as COVID-19 drives more into the digital age

Dan Henry, Green Dot President & CEO and Daniel Eckert, Green Dot Executive Vice President join Yahoo Finance’s On The Move to discuss the company's latest earnings report and weigh in on how Green Dot is faring amid the coronavirus outbreak.

Video Transcript

ADAM SHAPIRO: Shares of Green Dot are trading higher this morning, were up about 14%. And we've got two Dans for the price of one. Joining us in the stream to talk about this, Dan Henry, Green Dot's CEO and president-- he's joining us from Austin, Texas-- and Daniel Eckert, Green Dot's executive vice president and chief product strategy and development officer, who joins us from Arkansas.

Let me start with you, Mr. Henry. Congratulations on the earnings report. Most of us would know your product through a prepaid card. I was curious, with the COVID-19 crisis, if you're seeing people switch to more digital payments and if that has any real impact on your business.

ADVERTISEMENT

DAN HENRY: Hey, Adam. Thanks for having us today.

Yes, actually, the COVID impact has been painful to everybody in the country and across the board and our customers as well. If there is any sort of bonus on this, is, I think what COVID has done is driving people very quickly into more of the digital age in terms of being able to purchase products or having to purchase products electronically. So, typically, consumers that use Green Dot products have traditionally been cash-based consumers. And when you can no longer pay your cable bill or electric bill in cash, it does create a pretty dramatic impetus for a consumer to pick up a card and move into the electronic payments arena.

JULIA LA ROCHE: Hey, this is Julia La Roche. This question is going to be for Dan Eckert. I know you from covering Walmart. Welcome to Green Dot. Congratulations on the new role there.

We've talked a lot about this acceleration going on. There's an acceleration in fintech, retail. I guess you can combine the two, based on the last conversation we had. I would just love to get your views on what you think is going to be happening as we emerge on the other side of this crisis as it relates to the area that you all are in.

DAN ECKERT: Sure, Julia. And thrilled to be part of Green Dot and part of the Green Dot team with Dan.

I think you're tapping on exactly the insight that we had seen when I was serving Walmart, where customers want to engage in these types of services with the brands that they trust and that they know and love. And, increasingly, financial technology is becoming more embedded with those brands and the apps and the networks that they're engaged in.

We see, with a unique collection of assets at Green Dot, the ability to serve those brands through our Banking-as-a-Service platform because it's truly a unique set and collection of assets. You have a Fed-member bank. You have a licensed money transmitter in all 50 states and Puerto Rico. You have a fintech payments platform that can process these. And you also have retail distribution. You put those collection of assets together, and you can really power things that are truly imaginative for those brands, unlike they've ever seen before.

JULIA LA ROCHE: And, Dan Henry, for you perhaps, I thought it was interesting on the earnings call, you were already talking about 2021. I would love to hear your vision-- you're the new CEO there-- as it relates to the consumer business. What are you going to be working on? What is the moonshot for you?

DAN HENRY: I think Green Dot has just tremendous assets that have really been underutilized for a number of years now. And the underserved customer base in the United States is still a huge market. And so if you talk about a moonshot, there is not a financial institution in this country that has claimed the banner to serve the low- to moderate-income consumer in this country.

This is a consumer with unique needs. They need a transaction tool. They need short-term credit solutions. They need tools to actually build their credit. And, like it or not, this is a consumer that doesn't have a lot of money, doesn't have a lot of disposable income, so not a lot of people have the patience or the scale or the reach to serve this customer in mass. And so, yes, if it is a moonshot, our moonshot is to be the community bank, if you will, for the low-income consumer in this country.

JULIE HYMAN: Dan, I want to follow up with that, Dan Henry. This is Julie here. Those customers are having a tough time right now. I mean, a lot of people are having a tough time, but those folks in particular, many of them laid off either temporarily or permanently. And so what is that going to mean for your business when those people that you're talking about, as you just mentioned, have less income right now?

DAN HENRY: Yeah, it's an extremely difficult time for those consumers. And I think it requires an organization with the mentality to serve that consumer, to understand that, hey, if there's an authorization hold on your card for $100, that's a meaningful amount of money. And you need to respond to that very quickly, in earnest, you know, and correct those situations. But this consumer is very, very resilient. They find ways to make ends meet. I've often said I wish I could get our customers to go balance the budget, because they can survive on very little money.

But what's important is that we are always informing them as to how much they have, where they're spending it, and we support them when it's time to get their tax refund. We support them when it's time to get their unemployment benefits. We support them when they have direct deposits coming from two or three different jobs. So, again, it's an entirely different mentality that we have and possess in serving this consumer than you will see from traditional mainstream financial institutions.

ADAM SHAPIRO: Dan Eckert, I'm going to throw this question to you, because we had on the CEO of Klarna last week. They are a bank. They're Swedish. But they're also more consumer front-facing in they kind of have a layaway plan. Do you face competition with them for the market that Mr. Henry just described, or are you way ahead of them?

DAN ECKERT: Well, I think it's a terrific question, because there's clearly a lot of activity in this dynamic market known as financial technology. But each particular market is quite different. And so what works in Sweden and even in the EU is going to be different in regulatory landscape and how you can actually activate these things in the US. And I think that's why Green Dot is so well positioned in the US. Because, candidly, we talk about financial and technology, but there's so many of these players-- so-called challenger banks-- that are really just technology and marketing, but not financial services.

Green Dot has the assets of being a regulated entity both in money transmission as well as banking, and having a scaled, robust, modern platform to power these types of capabilities in very inventive ways. And I think that's why we have a really, really strong leg up relative to the competition.

JULIA LA ROCHE: And, Dan Henry-- it's Julia La Roche-- before we let you go, I would love to dig more into this idea of how you're going to help support your customers, your consumers. You were just referencing it earlier, but I would love to expand more on that.

DAN HENRY: Well, I think we just support the customer, first and foremost, with a mindset. And I know that's really hard to quantify and to really put a value on, but it's absolutely mission critical, you know, just to understand and to be able to walk in the shoes of a consumer from a low-income standpoint. For many of our customers, the Green Dot card, that is their only piece of plastic. They don't have a credit card. They don't have other means. And so you have to basically have a mindset of being very alert and very aware.

But then, from there, you take on, well, what other sorts of unique needs and services does a low-income consumer have as compared to other maybe high-net-worth individuals? And that's really just quick access to funds, maybe some more incentive and partnership arrangements with other retailers to provide them additional value and stretch their spending dollars.

ADAM SHAPIRO: All right. Dan Henry is Green Dot's CEO and president. Daniel Eckert is Green Dot's executive vice president and chief product strategy and development officer. We wish you both the best. And thank you for joining us On the Move. We'll be back right after this.