Green Dot Cuts Ribbon on Tech Center in China (July 14, 2015)
Green Dot Corp. today opened the doors to Green Dot Shanghai Software Technology Co. Ltd., a wholly owned subsidiary located in the Zhangjiang Hi Technology Park in the Pudong district of Shanghai. The 24,000-square-foot facility will employ Shanghai technology leaders and engineers, which Green Dot says will bring new technology solutions to Green Dot’s large-scale branchless banking platform in the U.S.
This is the financial services company’s first foray into an international market, but it appears that the technology facility in Shanghai—China’s biggest city and a global financial hub—is not part of a go-to-market strategy for products aimed at Chinese consumers. Instead, it’s part of the company’s long-term strategy to invest in infrastructure and efficiency to gain a competitive advantage in the U.S. market through greater levels of productivity and margin expansion, Green Dot said.
“[This] shows that Green Dot has plans to bring more technology-based financial services to market,” says Ben Jackson, director, prepaid advisory service, Mercator. “They have already done so by launching GoBank as a mobile checking account. The bold move is not the tech hub, but it’s likely that bold moves will come as a result of technology developed in the tech hub. I’m sure they have plans for products to come out of this center. The question is how soon will they bring them to market?”
The future of financial services will belong to companies that are focused on technology and their implementation of it, according to Kuan Archer, chief operating officer of Green Dot Corp. and executive director of Green Dot Shanghai.
Green Dot’s stock remained virtually unchanged following the news.
“It could have been India; it could have been Latvia. It just happened to be in China,” adds Larry Berlin, vice president at private equity and investment firm First Analysis Corp. “I suspect [Green Dot] found the expertise they needed at the price they wanted, and that’s what dictated [the decision].”
Payments companies are doubling down on fintech and so are investors. More than $1.1 billion was invested during Q1 2015, according to venture capital data firm CB Insights. Many payments companies also are supporting innovation hubs in the hopes of staying ahead of the curve. In May, Visa Europe opened an international innovation hub in London, MasterCard opened a technology hub in New York City last October, and American Express opened its Financial Innovation Lab, which provides researchers and practitioners from nonprofit organizations the opportunity to test their ideas on the American Express Serve prepaid account platform.