Green Dot 2010 Annual Report Download - page 11

Our Business Model
Our business model focuses on four major elements: our consumers; our distribution; our products
and services; and our proprietary technology, which provides functionality for and connectivity to the Green
Dot Network and supports the platform that brings the other three elements together.
Our Consumers
We have designed our products and services to appeal primarily to consumers living in households
that earn less than $75,000 annually across the following four consumer segments:
•Never-banked — households in which no one has ever had a bank account;
•Previously-banked — households in which at least one member has previously had a bank account,
but no one has one currently;
•Underbanked — households in which at least one member currently has a bank account, but that
also use non-bank financial service providers to conduct routine transactions like check cashing or
bill payment; and
•Fully-banked — households that primarily rely on traditional financial services.
Based on data from the FDIC, the Federal Reserve Bank, the U.S. Census and the Center for
Financial Services Innovation and our proprietary data, we believe these four consumer segments
collectively represent an addressable market of approximately 160 million people in the United States.
Customers in these different segments tend to purchase and use our products for different reasons
and in different ways. For example, we believe never-banked consumers use our products as a safe,
controlled way to spend cash and as a means to access channels of trade, such as online purchases,
where cash cannot be used. We believe previously-banked consumers use our products as a convenient
and affordable substitute for a traditional checking account by depositing payroll checks (via direct or in-
store deposit) on a Green Dot GPR card and using our products to pay bills, shop online, monitor spending
and withdraw cash from ATM machines.
We believe underbanked consumers use our products in ways similar to those of the never- and
previously-banked segments, but additionally view our products as a credit card substitute. For example,
underbanked consumers use our products to make purchases at physical and online merchants, make
travel arrangements and guarantee reservations. We believe fully-banked consumers use our products as
companion products to their bank checking account, segregating funds into separate accounts for a
variety of uses. For example, fully-banked consumers often use our cards to shop on the Internet without
providing their bank debit card account information online. These consumers also use our products to
control spending, designate funds for specific uses, prevent overdrafts in their checking accounts, or load
funds into specific accounts, such as a PayPal account.
Our Distribution
We achieve broad distribution of our products and services through our retail distributors, the Internet
and relationships with other businesses. In addition, our distribution is enhanced by businesses that accept
reloads or payments through the Green Dot Network, which we refer to as our network acceptance
members, because they encourage their customers to use our prepaid financial services.
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