Green Dot 2010 Annual Report Download - page 28

• reload network providers, such as Visa, Inc. (or Visa), MasterCard International Incorporated (or
MasterCard), The Western Union Company (or Western Union) and MoneyGram International, Inc.
(or MoneyGram); and
• prepaid card distributors, such as InComm and Blackhawk Network, Inc. (or Blackhawk).
Some of these vendors compete with us in more than one of the vendor categories described above,
while others are primarily focused in a single category. In addition, competitors in one category have
worked or are working with competitors in other categories to compete with us. A portion of our cash
transfer revenues is derived from reloads to cards managed by companies that compete with us as
program managers. We also face potential competition from retail distributors or from other companies,
such as Visa, that may in the future decide to compete, or compete more aggressively, in the prepaid
financial services industry.
We also compete with businesses outside of the prepaid financial services industry, including
traditional providers of financial services, such as banks that offer demand deposit accounts and card
issuers that offer credit cards, private label retail cards and gift cards.
Many existing and potential competitors have longer operating histories and greater name recognition
than we do. In addition, many of our existing and potential competitors are substantially larger than we are,
may already have or could develop substantially greater financial and other resources than we have, may
offer, develop or introduce a wider range of programs and services than we offer or may use more effective
advertising and marketing strategies than we do to achieve broader brand recognition, customer aware-
ness and retail penetration. We may also face price competition that results in decreases in the purchase
and use of our products and services. To stay competitive, we may have to increase the incentives that we
offer to our retail distributors and decrease the prices of our products and services, which could adversely
affect our operating results.
Our continued growth depends on our ability to compete effectively against existing and potential
competitors that seek to provide prepaid cards or other electronic payment products and services. If we fail
to compete effectively against any of the foregoing threats, our revenues, operating results, prospects for
future growth and overall business could be materially and adversely affected.
We operate in a highly regulated environment, and failure by us, the banks that issue our
cards or the businesses that participate in our reload network to comply with applicable
laws and regulations could have an adverse effect on our business, financial position and
results of operations.
We operate in a highly regulated environment, and failure by us, the banks that issue our cards or the
businesses that participate in our reload network to comply with the laws and regulations to which we are
subject could negatively impact our business. We are subject to state money transmission licensing
requirements and a wide range of federal and other state laws and regulations, which are described under
“Business — Regulation” above. In particular, our products and services are subject to an increasingly
strict set of legal and regulatory requirements intended to protect consumers and to help detect and
prevent money laundering, terrorist financing and other illicit activities.
Many of these laws and regulations are evolving, unclear and inconsistent across various jurisdic-
tions, and ensuring compliance with them is difficult and costly. For example, with increasing frequency,
federal and state regulators are holding businesses like ours to higher standards of training, monitoring
and compliance, including monitoring for possible violations of laws by the businesses that participate in
our reload network. Failure by us or those businesses to comply with the laws and regulations to which we
are subject could result in fines, penalties or limitations on our ability to conduct our business, or federal or
state actions, any of which could significantly harm our reputation with consumers and other network
participants, banks that issue our cards and regulators, and could materially and adversely affect our
business, operating results and financial condition.
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