GREEN DOT CORP - Annual Report: 2019 (Form 10-K)

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•	Innovative consumer and small business checking account products that allow customers to acquire and manage their checking account entirely through a mobile application available on smartphone devices;

•	Network-branded reloadable prepaid debit cards marketed under several leading consumer brand names, collectively referred to as General Purpose Reloadable or GPR cards;

•	Network-branded gift cards (known as open-loop) that are sold at participating retail stores; and

•	Secured credit programs designed to help people establish or rehabilitate their national credit bureau score. These programs are backed by the customer's own security deposit held on deposit at Green Dot Bank or other banks in accounts held under our control and therefore, we have no risk of material loss resulting from the customer's non-payment of their obligation.

•	Our “Reload@TheRegister” swipe reload service allows consumers to add funds at the point-of-sale at any participating retailer to accounts we issue or manage and accounts issued by any third-party bank or program

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•	Our MoneyPak PIN product provides consumers the ability to add funds at the point-of-sale at any participating retailer to accounts we issue or manage and accounts issued by any third party bank or program manager that has enabled its cards to accept funds through our processing system.

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Our e-cash remittance service enables consumers to add funds at the point-of-sale at any participating retailer to accounts we issue or manage and accounts issued by any third party bank or program manager that has enabled its accounts to accept funds through our processing system. Consumers can also cash-out money sent to them by a business through the use of our e-cash remittance service when Green Dot sends a unique barcode to the customer’s smartphone, which is then presented to a cashier at a participating retailer who then scans the barcode to fulfill the transfer.

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Tax refund transfers that provide the processing technology to facilitate receipt of a taxpayers' refund proceeds. When a customer of a third-party tax preparation provider chooses to pay their tax preparation fees using our processing services, we deduct the tax preparation service fee and our processing service fee from the customer's refund and remit the remaining balance to the customer's account;

•	Small business lending to independent tax preparation providers that seek small advances in order to help provide working capital prior to generating income during the tax filing season;

•	Fast Cash Advance, a consumer-friendly loan that enables tax refund recipients utilizing our tax processing services the opportunity to receive a portion of their expected tax refund amount in advance of receiving their actual tax refund.

•	distribution arrangements with more than 100,000 mostly major chain retail locations, which we refer to as “retail distributors” and thousands of neighborhood Financial Service Center locations;

•	several differently branded, Green Dot-owned and operated direct-to-consumer online and direct mail customer acquisition platforms;

•	card offerings that are integrated into the tax preparation software that enables a tax preparation provider to offer its customers a Green Dot Bank-issued GPR card for the purpose of receiving tax refunds more rapidly and securely than check disbursements; and

•	apps compatible with the iOS and Android operating systems downloaded through the corresponding app store.

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•	Card programs offered by our BaaS partners through their channels of trade (our "BaaS" account programs);

•	Card programs offered by corporate enterprises that provide payroll cards to their employees to receive wage disbursements (our "PayCard" programs);

•	Money Processing services offered to consumers through our Consumer Business, our BaaS partners and other third-party bank or program managers;

•	Tax Processing services through more than 25,000 small and large tax preparation companies and individual tax preparers, which are sometimes referred to as electronic return originators, or “EROs”, who are able to offer our products and services to their customers through the use of various tax preparation industry software packages with which our products are integrated; and

•	Capital and deposit taking services provided by Green Dot Bank.

•	Issuing services as the payment network member bank and settlement bank for our GPR card, spend-based P2P programs, gift card and checking account products;

•	Credit card issuing and capital lending services for our Green Dot Platinum Visa Secured Credit Card; and

•	Settlement bank for our reload and tax refund services within our Processing and Settlement Services segment.

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•	breadth of distribution;

•	speed and quality of innovation;

•	reliability of system performance and security;

•	scalability of platform services;

•	quality of service;

•	compliance and regulatory capabilities;

•	brand recognition and reputation; and

•	pricing.

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•	the Truth in Savings Act and Regulation DD issued by the CFPB, which require disclosure of deposit terms to consumers;

•	Regulation CC issued by the Federal Reserve, which relates to the availability of deposit funds to consumers;

•	the Right to Financial Privacy Act, which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and

•	the Electronic Fund Transfer Act and Regulation E issued by the CFPB, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.

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•	the timing and volume of purchases and use of our products and services;

•	the timing and volume of tax refunds processed by us, including the impact of any general delays in tax refund disbursements from the U.S. and State Treasuries;

•	the timing and success of new product or service introductions by us or our competitors;

•	seasonality in the purchase or use of our products and services;

•	changes in the level of interchange rates that can be charged;

•	fluctuations in customer retention rates;

•	changes in the mix of products and services that we sell;

•	changes in the mix of retail distributors through which we sell our products and services;

•	the timing of commencement, renegotiation or termination of relationships with significant retail distributors and BaaS platform partners;

•	the timing of commencement of new product development and initiatives, the timing of costs of existing product roll-outs and the length of time we must invest in those new products, channels or retail distributors before they generate material operating revenues;

•	our ability to effectively sell our products through direct-to-consumer initiatives;

•	changes in our or our competitors’ pricing policies or sales terms;

•	new product offerings from our competitors;

•	costs associated with significant changes in our risk policies and controls;

•	the amount and timing of costs related to fraud losses;

•	the amount and timing of commencement and termination of major advertising campaigns, including sponsorships;

•	the amount and timing of costs related to the acquisition of complementary businesses;

•	the amount and timing of costs of any major litigation to which we are a party;

•	disruptions in the performance of our products and services, including interruptions in the services we provide to other businesses, and the associated financial impact thereof;

•	the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our business, operations and infrastructure;

•	interest rate volatility;

•	changes in our executive leadership team;

•	accounting charges related to impairment of goodwill and other intangible assets;

•	our ability to control costs, including third-party service provider costs and sales and marketing expenses in an increasingly competitive market;

•	volatility in the trading price of our Class A common stock, which may lead to higher or lower stock-based compensation expenses; and

•	changes in the political or regulatory environment affecting the banking, electronic payments or tax refund processing industries.

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•	increased regulatory and compliance requirements;

•	implementation or remediation of controls, procedures and policies at the acquired company;

•	diversion of management time and focus from operation of our then-existing business;

•	integration and coordination of product, sales, marketing, program and systems management functions;

•	transition of the acquired company’s users and customers onto our systems;

•	integration of the acquired company’s accounting, information management, human resource and other administrative systems and operations generally with ours;

•	integration of employees from the acquired company into our organization;

•	loss or termination of employees, including costs associated with the termination or replacement of those employees;

•	liability for activities of the acquired company prior to the acquisition, including violations of law, commercial disputes, and tax and other known and unknown liabilities; and

•	increased litigation or other claims in connection with the acquired company, including claims brought by terminated employees, customers, former stockholders or other third parties.

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•	issuing additional shares of our Class A common stock or other equity securities;

•	issuing convertible or other debt securities; and

•	borrowing funds under a credit facility.

•	increased complexity and costs of managing international operations;

•	regional economic instability;

•	geopolitical instability and military conflicts;

•	limited protection of our intellectual property and other assets;

•	compliance with local laws and regulations and unanticipated changes in local laws and regulations, including tax laws and regulations;

•	foreign currency exchange fluctuations relating to our international operating activities;

•	local business and cultural factors that differ from our normal standards and practices; and

•	differing employment practices and labor relations.

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•	price and volume fluctuations in the overall stock market from time to time;

•	significant volatility in the market prices and trading volumes of financial services company stocks;

•	actual or anticipated changes in our results of operations or fluctuations in our operating results;

•	actual or anticipated changes in the expectations of investors or the recommendations of any securities analysts who follow our Class A common stock;

•	actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;

•	the public’s reaction to our press releases, other public announcements and filings with the SEC;

•	business disruptions and costs related to shareholder activism;

•	litigation and investigations or proceedings involving us, our industry or both or investigations by regulators into our operations or those of our competitors;

•	new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

•	changes in accounting standards, policies, guidelines, interpretations or principles;

•	general economic conditions;

•	changes to the indices in which our Class A common stock is included; and

•	sales of shares of our Class A common stock by us or our stockholders.

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•	provide for non-cumulative voting in the election of directors;

•	authorize our Board of Directors, without stockholder approval, to issue preferred stock with terms determined by our Board of Directors and to issue additional shares of our Class A common stock;

•	limit the voting power of a holder, or group of affiliated holders, of more than 24.9% of our common stock to 14.9%;

•	provide that only our Board of Directors may set the number of directors constituting our Board of Directors or fill vacant directorships;

•	prohibit stockholder action by written consent and limit who may call a special meeting of stockholders; and

•	require advance notification of stockholder nominations for election to our Board of Directors and of stockholder proposals.

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(1)	Represents the recorded fair value of the shares for which our right to repurchase lapsed during the specified period pursuant to the terms of the agreement under which we issued 2,208,552 shares of our Class A common stock to Walmart. Our right to repurchase these shares fully lapsed in May 2015.

(2)	Includes stock-based compensation expense of $29.6 million, $50.1 million, $40.7 million, $28.3 million, and $27.0 million for the years ended December 31, 2019, 2018, 2017, 2016 and 2015, respectively.

(3)	Includes $2.7 million, $0.5 million, $90.9 million, $12.1 million, and $5.8 million of restricted cash as of December 31, 2019, 2018, 2017, 2016, and 2015, respectively.

(4)

Our retail distributors collect customer funds for purchases of new cards and reloads at the point of sale and then remit these funds directly to bank accounts established for the benefit of these customers by the banks that issue our cards. Our retail distributors’ remittance of these funds takes an average of two business days. Settlement assets represent the amounts due from our retail distributors and partners for customer funds collected at the point of sale that have not yet been received by our subsidiary bank. Also included in this balance are payroll amounts funded in advance (up to two days early) to certain cardholders who are eligible to participate in our early direct deposit programs. Obligations to customers represent customer funds collected from or to be remitted by our retail distributors for which the underlying products have not been activated. Settlement obligations represent the customer funds received by our subsidiary bank that are due to third-party card issuing banks upon activation.

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(1)	Primarily future minimum payments under agreements with vendors and our retail distributors. See Note 20 — Commitments and Contingencies of the Notes to our Consolidated Financial Statements.

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(1)	Non-performing loans are included in the respective average loan balances. Income, if any, on such loans is recognized on a cash basis.

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(1)	The change in interest income and expense not solely due to changes in volume or rate has been allocated on a pro-rata basis to the volume and rate columns.

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*	Indicates management contract or compensatory plan or arrangement.

**	Furnished, not filed.

+	Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K, Item 601(b)(10).

†	Registrant has omitted portions of the referenced exhibit and filed such exhibit separately with the Securities and Exchange Commission pursuant to a grant of confidential treatment under Rule 406 or Rule 24b-2 promulgated under the Securities Act or Rule 24b-2 promulgated under the Exchange Act.

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