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by spking
3333 days ago
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Some may not realize this, but there is a YC backstory here. Sam Altman's startup (Loopt) was acquired by Green Dot (the company behind the WMT Money Card) back in 2012. Many of the GoBank features mentioned in the article (Stash/Vault, Fortune Teller) came directly from Steve Streit (Green Dot CEO), acqui-hired Loopt employees, backed up by IDEO research that was commissioned by Steve several months before the acquisition. I was working there at the time Loopt was folded in, and was lucky enough to more or less report to Steve. I can tell you he really is deeply passionate about the underbanked community. I saw him fly into a fit of rage when a major outage prevented customers from accessing their funds for a brief time ("Don't f*ck with my customers' money!"). Say what you will about the fees, but these prepaid cards are a very convenient lifeline to many people who would otherwise be shut out of the system. |
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On that subject, an interesting result of that lack of access is the existence of subprime retail, Bluestem Brands being a big example. Companies like this were able to coexist with Amazon because they're willing to extend credit to people who can't get a debit/credit card to pay at Amazon. The tradeoff is, of course, higher prices (~30% price difference compared to Amazon in many cases). The increasing prevalence of prepaid cards is definitely a net positive in my opinion. It's reducing an artificial inefficiency in the market and helping those on the most precarious rungs of the economic ladder.
Disclosure: I currently work with Amazon and used to work with Bluestem. I don't speak for either.