Green Dot Buys Card Processing Firm eCommLinkOriginally published January 25, 2012 at 2:54 p.m., updated January 26, 2012 at 11:37 a.m.
Editor's Note: This story has been corrected to clarify that Green Dot has two-year processing agreement with a company called Total Systems Services (TSYS) not TeleCommunication Systems Inc.
Prepaid debit card provider Green Dot Corp. announced on Wednesday that it has acquired the assets of a Las Vegas firm that processes card payments.
The $2.5 million deal for eCommLink will enable the Monrovia company to save money on transaction processing. Outside transaction processors currently account for about one third of its processing expenses.
Green Dot said it won’t start seeing savings until the end of a two-year processing agreement it has with TSYS. The company plans to build an in-house system based on eCommLink’s technology.
“Green Dot expects to benefit from faster speed to market for product development, more flexibility in serving its customers and reduced operational expenses,” said Chief Executive Steve Streit in a statement.
Green Dot last month completed acquisition of Bonneville Bancorp., which under the name Green Dot Bank will be used to issue and administer most of the company’s debit cards, which primarily are sold at retailers. That’s a function that has been handled by an outside company.
Green Dot shares closed up 19 cents, or less than 1 percent, to $30.99 on the New York Stock Exchange.
Green Dot is scheduled to release fourth quarter earnings on Thursday.