Russell Simmons Sells RushCard to Green Dot for $147 MILLION

[Hotlantan]

Russell Simmons Sells RushCard to Green Dot for $147 Mil.
http://www.billboard.com/articles/b...mmons-sells-rushcard-to-green-dot-for-147-mil




The Hip-Hop mogul drops his pre-paid debit card business.

RushCard, the prepaid debit card company founded by hip-hop mogul Russell Simmons, is being bought by rival Green Dot for $147 million.

Green Dot said Monday it will buy UniRush, the parent company of RushCard as well as the Rapid! payroll debit card. Simmons started RushCard in 2003 as one of the first prepaid cards to focus on minority customers and charge lower-than-average fees.

Prepaid debit cards are largely used by the "unbanked," or those who do not have a checking or savings account and largely rely on cash to pay their bills month to month.




RushCard is perhaps best known for a software upgrade that went haywire in 2015, cutting off more than 400,000 customers from their funds for days and even weeks. People told of being unable to purchase necessities for their children, and customer service lines were tied up for weeks.

Simmons, the Chairman and CEO of Rush Communications and co-founder of the iconic Def Jam Recordings, apologized and took personal responsibility, and later used some of his personal fortune to cover customers' expenses. "This whole situation has been devastating for them, and we want to make sure they are made whole," Simmons told The Associated Press in 2015.

Green Dot CEO Steve Streit said he and Simmons had on-and-off conversations about an acquisition going back years.

Despite RushCard's 2015 problems, Streit said Green Dot is buying RushCard largely for the name recognition as well as its sizeable customer base of 750,000 people. Green Dot plans to retain the RushCard name and brand along with its other products.

"Having his name associated with RushCard is a big reason why we are buying it," Streit said in an interview.

As part of the transaction, Streit said Green Dot will not be liable for any settlements tied to the 2015 incident. This includes the investigation still ongoing by the Consumer Financial Protection Bureau.

Streit said the Rapid! payroll card also made the company attractive. Rapid! has 2,500 corporate customers who use the card as an option to pay employees who may not have regular bank accounts.

 

[easy_b]

I would thought it would be worth more than that but some change is some change

 

[4 Dimensional]

Damn. That definitely ain't chump change.

This mofo got over with this bullshit all the way until he sold it for a decent price.

 

[Hotlantan]

Ten years ago prepaid debit cards were the wild west of the payment industry. Most of the players in the industry had little history in financial services. The market catered to the unbanked as an alternative to expensive check cashing stores.

Fees often were outrageous and difficult to understand. There were some low fee options, but there were as many expensive ones. The fees are still confusing, which led me to build the first robust debit card fee calculator.

Several seismic changes occurred in the prepaid card market since these early days:

• The prepaid debit card market has grown exponentially.
• Prepaid debit cards are now not only for the unbanked. Consumers use them to help control spending and to transfer money to teenage and young adult children.
• Several banks now offer their own prepaid cards. Chase offers the Chase Liquid reloadable card for a flat fee of $4.95. BBVA Compase offers the BBVA ClearSpend Prepaid Visa card with no monthly or annual fee.
• American Express entered the market with its popular Serve card.
• Major brands entered the market including Walmart, PayPal, and Western Union.

And that brings us to Green Dot and RushCard. They are two of the oldest prepaid debit cards in the marketplace. RushCard popularized prepaid cards with the help of its founder, Russell Simmons. Green Dot pioneered the reloadable prepaid card and is the largest provider in the U.S.

Over the past several years Green Dot has undertaken to expand its dominance in the market:

• In 2011 it became a bank holding company.
• In 2015 it acquired AccountNow and Achieve Card.
• In 2016 it entered the secured credit card market.

And with today’s announcement, Green Dot is set to buy RushCard. According to an 8-k filed with the SEC, Green Dot has agreed to pay $147 million in cash (less some potential adjustments). It has also agreed to pay an earn-out of at least $20 million.

Besides its eponymous card, it now owns or markets several other prepaid options. Today’s press release best describes the scope of its operations:

As a direct-to-consumer online business, following the acquisition, the RushCard program will be consolidated into the “Green Dot Direct” division that houses GreenDot.com, GreenDot.com/Platinum Secured Visa Credit Card, WalmartMoneyCard.com, AccountNow.com, AchieveCard.com, GoBank.com and ReadyDebit.com.

http://www.forbes.com/sites/robertb...-buy-rushcard-for-at-least-167-million/print/

 

[dtownsfinest]

I would thought it would be worth more than that but some change is some change

Damn really? I thought it was worth less but shit I didn't know people actually had rush cards.

 

[easy_b]

Damn really? I thought it was worth less but shit I didn't know people actually had rush cards.

There's a lot of people out there that cannot get bank accounts

 

[BlkStrength]

Trump in office now...

All this stuff about to be back in style....

payday loans, high interest rate cards, prepaid cards, cash advances...etc

 

[peterlongshort]

 

[Mask]

Trump in office now...

All this stuff about to be back in style....

payday loans, high interest rate cards, prepaid cards, cash advances...etc

So do you think he could've held onto it for future growth?

 

[easy_b]

Trump in office now...

All this stuff about to be back in style....

payday loans, high interest rate cards, prepaid cards, cash advances...etc

Yep crash is going to happen quickly hell to stock market is not doing too good the last two days since homeboy threw a monkey-wrench into traveling

 

[Hotlantan]

There's a lot of people out there that cannot get bank accounts

Yeah that is very true but why the fuck would Green Dot pay $147M for a 750k customer base - that is an almost $200 per person acquisition cost. Why would a new consumer choose a RushCard when a WalMart Card (as an example) does everything the same plus more, is MUCH easier to get, and costs less than half the price to maintain? Kids now don't even remember Def Jam! And with all of the hood radio advertising they do, you would have thought that there were more than 750k RushCards out there.

 

[easy_b]

Yeah that is very true but why the fuck would Green Dot pay $147M for a 750k customer base - that is an almost $200 per person acquisition cost. Why would a new consumer choose a RushCard when a WalMart Card (as an example) does everything the same plus more, is MUCH easier to get, and costs less than half the price to maintain? Kids now don't even remember Def Jam!

Hey I agree with you I'll keep my money under my bed in a old cookie jar before our use one of those cards

 

[Flawless]

I still don't get why people who use these cards don't just open a fucking bank account.

 

[PDQ21]

I still don't get why people who use these cards don't just open a fucking bank account.

They can't

I could go into detail but I really don't have the time, u a big boy yall figure it out in no time

 

[Flawless]

They can't

I could go into detail but I really don't have the time, u a big boy yall figure it out in no time

oh please I have heard that excuse before, while that might account for some, the rest are just uneducated

 

[D-TOWN REP]

oh please I have heard that excuse before, while that might account for some, the rest are just uneducated

Man it's more people than you think

It's tons of reckless ass mufuckas out here who can't get shit at all in their name

 

[Amajorfucup]

I would thought it would be worth more than that but some change is some change

Nah.. That $147 mill is a grip. Russ came up actually.

Yeah that is very true but why the fuck would Green Dot pay $147M for a 750k customer base - that is an almost $200 per person acquisition cost...

Consumer information (data) is very valuable to corporations. Its literally how they make their money and target buyers.. They essentially purchased nearly one million millennial consumers personal and buying information (data) along with the business itself...

 

[Mask]

Nah.. That $147 mill is a grip. Russ came up actually.

Consumer information (data) is very valuable to corporations. Its literally how they make their money and target buyers.. They essentially purchased nearly one million millennial consumers personal and buying information (data) along with the business itself...

Yup there's huge money in data minding

 

[34real]

Russell is apart of the culture and was able to capitalize off of it like he should have.All I want him to do for the rest of his life is to start using white people to make his millions off of and of help younger black men get started into becoming the next him.His credit card was a scam and I don't know why black people who pay him told hold their money in the first place.

Anyways good for him

 

[Helico-pterFunk]

 

[Mr. Del]

Why would a new consumer choose a RushCard when a WalMart Card (as an example) does everything the same plus more, is MUCH easier to get, and costs less than half the price to maintain?

Walmart isn't everywhere. Plus 750,000 users is nothing to sneeze at.

 

[BKF]

Man it's more people than you think

It's tons of reckless ass mufuckas out here who can't get shit at all in their name

Many not of their doing but their parent/s doing.

 

[Sango]

I need a come up.

 

[Moving Target]

I need a come up.

Check the crypto currency thread on bitcoin and all the info that's being passed around...BGOL in the hunt. brothers is putting brothers up on game.

 

[Sango]

Check the crypto currency thread on bitcoin and all the info that's being passed around...BGOL in the hunt. brothers is putting brothers up on game.

Much appreciated! I'm waiting on work HR to give me the ok... conflicts of and bullshit.

 

[theteacher]

Whoever gets a Rush card is an idiot.
this is another example of raping your own people.
those interest rate on that card is crazy.
and this is what you advertise to your people
SMH
worse or the same as a drug dealer.​

 

[PDQ21]

Whoever gets a Rush card is an idiot.
this is another example of raping your own people.
those interest rate on that card is crazy.
and this is what you advertise to your people
SMH
worse or the same as a drug dealer.​

That's the game homie

 

[tallblacknyc]

I still don't get why people who use these cards don't just open a fucking bank account.

if you make tax free money and want to buy something online u can use these cards to purchase these items..samething with other purchases like hotel stays and other things that need/uses cards... it's a lot of tax free money people out there

 

[trstar]

Whoever gets a Rush card is an idiot.
this is another example of raping your own people.
those interest rate on that card is crazy.
and this is what you advertise to your people
SMH
worse or the same as a drug dealer.​

It fits the Green Dot market. I always associate Green Dot with online scammers