4 ms·

That's funny, I hadn't heard of Green Dot until a couple weeks ago. I received a Green Dot card as a gift and was frustrated with the required phone registrati

That's funny, I hadn't heard of Green Dot until a couple weeks ago. I received a Green Dot card as a gift and was frustrated with the required phone registration process. They immediately asked for name, DoB, and SSN, apparently because the PATRIOT act requires it. This seemed like a pretty big invasion of privacy for something I didn't personally opt into. They will also kindly deduct $5.95/month from the balance every month that it goes unused (which is illegal in many states, as far as I know). Fortunately they will cut you a refund check if you ask for one on the phone. Note to (monetary) gift givers out there: cash is still king.

FluidDjango 16y ago
Someone mentioned in a TechCrunch comment that there are other (up-and-coming) start-ups working on models that may be more customer-friendly. Anyone know of competitors to green dot? ...I'd like to hear about some alternate business models being used for these services.
- rms 16y ago
  Simon Malls sells non-refillable American Express cards for $2.99; no monthly fee. There is no billing address associated with the credit card and in person at their malls they don't check ID for orders under a certain dollar amount. http://www.simon.com/giftcard/ http://www.simon.com/giftcard/
  - lzw 16y ago
    They are able to do this because the amount of balance on the card, and the features of the card (not certain which ones) allow them to operate this card as a gift card, rather than a "Bank Account" which is what the PATRIOT ACT defines the other such cards as.
- gexla 16y ago
  AccountNow is another one and has a much higher limit for how much you can fund to your account and keep there ($10,000 vs $2,500.) These services are quite valuable for people who are unable to get checking accounts because they got themselves reported to the "chex system" which is basically the equivalent of a bad credit report but only used by banks.
- pxlpshr 16y ago
  Yes. Another prepaid card company called NetSpend filed to IPO this year too. The original founders of NetSpend, Roy and Bertrand Sosa, are hispanic immigrants and pioneered the prepaid model before GreenDot after recognizing a gap in the industry. As the story goes, they created NetSpend with only $750 in their apartment living room. They later left NetSpend to found MPOWER Group in 2007. Our company was acquired by one of the MPOWER companies this year, and we couldn't be happier about the leadership and long-term vision here. The Sosa brothers are extremely genuine people. This time they're taking a closer look at banking and underserved markets, and it's a great time for the right kind of innovation in this industry if you ask me. Last ~2 years have been spent building out product and a multinational infrastructure, I think you'll start hearing more about MPOWER in the near future as they ramp up marketing and social media efforts here in the States. http://www.mpowerlabs.com http://www.mpowerlabs.com http://www.mangomoney.com http://www.mangomoney.com http://www.revworldwide.com http://www.revworldwide.com http://www.yapsend.com http://www.yapsend.com
lsc 16y ago
the problem, I think, is that anyone offering 'private' electronic money is going to go the way of e-gold. The government simply won't tolerate it. (I'm not making any statement about the legitimacy of the government blocking private currencies... I'm just pointing out that the historical evidence has been that the government won't tolerate private electronic money.)
- ynniv 16y ago
  What about Green Dot is an alternative currency?
  - sethg 16y ago
    If someone could buy a prepaid debit card for cash without showing ID, and add money to it without showing ID, and spend from it without showing ID, then Alice could buy a card, Bob could load $5000 onto it, and Carol could read the card number over the phone to David. To achieve the same kind of anonymity today, someone would have to accumulate $5000 in cash and put it in David’s physical possession.
  - lsc 16y ago
    I don't think the government minds alternative currencies. The possibility of easily shifting large amounts of currency anonymously, I think, is what the government has a problem with. Because green dot checks id, etc... it's not a problem. If E-gold asked for your ID, your SSN and reported things as a bank would from the beginning, I don't think e-gold would have had an insurmountable problem, either. By "private" I meant "allows anonymous users" not "owned by someone other than the government." which is very unclear. I've been up all night working and my grammar is degraded.
    - ynniv 16y ago
      Your comment used to say "alternative" where it now says "private electronic". This drastically changes the meaning, and makes my comment irrelevant.
patio11 16y ago
It isn't specifically the Patriot Act, it is a Treasury Regulation called "Know Your Customer (KYC)" aimed at preventing money laundering. We've had similar requirements for essentially forever, but they became more explicit recently. The specific mechanism is up to the individual bank / financial services firm.

FluidDjango 16y ago

Someone mentioned in a TechCrunch comment that there are other (up-and-coming) start-ups working on models that may be more customer-friendly. Anyone know of competitors to green dot? ...I'd like to hear about some alternate business models being used for these services.

rms 16y ago
Simon Malls sells non-refillable American Express cards for $2.99; no monthly fee. There is no billing address associated with the credit card and in person at their malls they don't check ID for orders under a certain dollar amount. http://www.simon.com/giftcard/ http://www.simon.com/giftcard/
- lzw 16y ago
  They are able to do this because the amount of balance on the card, and the features of the card (not certain which ones) allow them to operate this card as a gift card, rather than a "Bank Account" which is what the PATRIOT ACT defines the other such cards as.
gexla 16y ago
AccountNow is another one and has a much higher limit for how much you can fund to your account and keep there ($10,000 vs $2,500.) These services are quite valuable for people who are unable to get checking accounts because they got themselves reported to the "chex system" which is basically the equivalent of a bad credit report but only used by banks.
pxlpshr 16y ago
Yes. Another prepaid card company called NetSpend filed to IPO this year too. The original founders of NetSpend, Roy and Bertrand Sosa, are hispanic immigrants and pioneered the prepaid model before GreenDot after recognizing a gap in the industry. As the story goes, they created NetSpend with only $750 in their apartment living room. They later left NetSpend to found MPOWER Group in 2007. Our company was acquired by one of the MPOWER companies this year, and we couldn't be happier about the leadership and long-term vision here. The Sosa brothers are extremely genuine people. This time they're taking a closer look at banking and underserved markets, and it's a great time for the right kind of innovation in this industry if you ask me. Last ~2 years have been spent building out product and a multinational infrastructure, I think you'll start hearing more about MPOWER in the near future as they ramp up marketing and social media efforts here in the States. http://www.mpowerlabs.com http://www.mpowerlabs.com http://www.mangomoney.com http://www.mangomoney.com http://www.revworldwide.com http://www.revworldwide.com http://www.yapsend.com http://www.yapsend.com

lsc 16y ago

the problem, I think, is that anyone offering 'private' electronic money is going to go the way of e-gold. The government simply won't tolerate it. (I'm not making any statement about the legitimacy of the government blocking private currencies... I'm just pointing out that the historical evidence has been that the government won't tolerate private electronic money.)

ynniv 16y ago
What about Green Dot is an alternative currency?
- sethg 16y ago
  If someone could buy a prepaid debit card for cash without showing ID, and add money to it without showing ID, and spend from it without showing ID, then Alice could buy a card, Bob could load $5000 onto it, and Carol could read the card number over the phone to David. To achieve the same kind of anonymity today, someone would have to accumulate $5000 in cash and put it in David’s physical possession.
- lsc 16y ago
  I don't think the government minds alternative currencies. The possibility of easily shifting large amounts of currency anonymously, I think, is what the government has a problem with. Because green dot checks id, etc... it's not a problem. If E-gold asked for your ID, your SSN and reported things as a bank would from the beginning, I don't think e-gold would have had an insurmountable problem, either. By "private" I meant "allows anonymous users" not "owned by someone other than the government." which is very unclear. I've been up all night working and my grammar is degraded.
  - ynniv 16y ago
    Your comment used to say "alternative" where it now says "private electronic". This drastically changes the meaning, and makes my comment irrelevant.

patio11 16y ago

It isn't specifically the Patriot Act, it is a Treasury Regulation called "Know Your Customer (KYC)" aimed at preventing money laundering. We've had similar requirements for essentially forever, but they became more explicit recently. The specific mechanism is up to the individual bank / financial services firm.