The purpose of this blog is to answer the question, “How does Greenlight make money?” Areas of focus include the history of Greenlight, it’s early days to the current situation of Greenlight, what makes Greenlight unique in its working, and most importantly the in-depth process of how Green Light generates money.
How does greenlight make money
Greenlight makes money by charging customers a monthly subscription fee to use their platform, as well as interchange fees on every transaction made with their prepaid debit card.
The company generates revenue through paid subscription services based on monthly and other transaction fees based on debit card performance. Greenlight arranges multi-level memberships and makes money from millions of users.
Greenlight saw a rise in attention since most families stayed at home owing to the COVID-19 epidemic. Parents are devoting more time than ever before to investing in their children’s financial literacy. Many families rely on Greenlight to provide their children with the hands-on experience and simple educational resources they require.
Greenlight generates revenue through paid subscription plans and interchange fees on debit card transactions. While the company’s revenue is steadily expanding, families are saving more and more by becoming members of the Greenlight family. Greenlight, which serves over three million households, has saved users $120 million and counting with its smart tools and resources.
|Company Name: Greenlight Financial Technology, Inc.|
|Founders: Johnson Cook, Timothy Sheehan|
|Headquarter: Atlanta, Georgia, United States|
|Company Revenue: $34.3M per year|
|Key Competitors: GoHenry, BusyKid, Axos First Checking, Step|
What is Greenlight?
“Start them young,” as the popular saying goes. Greenlight’s services are centered on this remark because Greenlight’s goal is to create financial awareness and, eventually, financial literacy among children. Although it is not the first company to offer reloadable prepaid cards for children, it distinguishes itself by offering various unique services.
The Greenlight debit card, which is powered by Mastercard, may be used practically anywhere Mastercard is accepted, including millions of stores outside the United States. Children who live far away from their families can easily request that money be reloaded on their respective cards, particularly money for allowance and major school costs e.g., tuition, room, and board, school supplies, etc.
A Brief History of Greenlight
In the last few years, there have been a bunch of new financial technology firms that offer a variety of services across several platforms. Greenlight Financial Technology, for example, is a startup that distributes debit cards specifically to youngsters with the aim of improving their financial literacy. So far, the company has been a huge success, with a current valuation of $1.2 billion.
In 2014, Timothy Sheehan and Johnson-Cook created Greenlight Financial Technology. the company has raised about $297 million in public money since its establishment. In 2019, Drive Capital led a $54 million Series B investing round, and Canapi Ventures and TTV Capital led a $215 million Series C funding round. JP Morgan Chase, Wells Fargo, Live Oak Bank, BOND, DST Global, Goodwater Capital, Fin VC, and Relay Ventures were among the firms that participated in the two investment rounds.
Even though the company was founded in 2014, the Greenlight debit card was not introduced until 2017. The Greenlight Savings account and donation portal Greenlight Giving were launched in 2018.
Founders of Greenlight
Timothy Sheehan and Johnson Cook, co-founders, are no strangers to starting businesses from the ground up. Sheehan founded Reachable, a social media marketing platform, and Attributor Guardian, an online book protection service, while cook founded Atlanta Tech Village, a tech startup cluster. Sheehan formerly worked at Yahoo!, Fiserv, and CGAP, and Cook was a partner at Atlanta Ventures and Boom Ventures. Sheehan and Cook both completed their studies in Georgia, with Sheehan graduating from Marymount University and Cook from Georgia Institute of Technology.
How Does Greenlight Work and What Does it Offer?
The smartphone app improves parents’ access to their children’s money management activity in their debit cards. Here are some of the most important services offered by the company.
Debit Card Access:
With the prepaid card, which was introduced in 2017, parents can limit the amount of money that their children can spend on purchases. Although the card is accepted practically everywhere, adults have the authority to limit entrance to select stores. This method of protection is utilized to keep children secure from fraud and negative influences.
Gives Access to Educational Materials:
The mobile app provides excellent access to financial education, as well as a plethora of tools and services. Children will learn the actual meaning of money, including how to earn and spend it properly.
Provides a Savings Account:
The purpose of incorporating a savings account is to demonstrate to children the importance of saving in their accounts. Meanwhile, guardians can enable their children to keep the money from their parent-paid interest. Each family member is asked to commit to raising a specific amount to cheer together through a special savings program.
Cashback transactions can be made:
Children can earn money from a variety of transactions that take place as part of their membership programs. Simply put, the curriculum introduces children to the advantages of prudent financial management.
Investing Opportunities for Kids:
The curriculum teaches children the fundamentals of investing using a proactive approach. As a result of the Greenlight Invest+ and Greenlight Max plans, parents can take advantage of the resources available to them to guide their children through their financial journey. Using this app, young users can learn about the fundamentals of the markets and stock news as reported by Morningstar data analysis.
A Safe Learning Place for children:
Using the program, you can ensure that all children get financial information in a safe learning environment. The reason for this is that every transaction remains under the supervision and agreement of the parents. So that they may keep track of their child’s activities, such as pending or missing debit cards.
Greenlight Business Model
Its business approach is based on the young generation’s financial literacy. The founders are deeply concerned about the lack of money management skills for children, particularly those who do not have the same opportunity.
Their team thinks that financial literacy is not a one-time course that can be taught in a classroom setting. Instead, it is a life-long learning lesson that people must learn from childhood to adulthood.
With a strong purpose of supporting parents in raising financially savvy children, the company has consistently expanded its offerings in the market, gaining millions of users. It’s no surprise that the company has established itself as a market leader.
Unavoidably, children will make mistakes. Nonetheless, the company encourages parents to instruct their children on how to solve and correct the problems. As a result, users may keep an eye on their children to prevent them from ruining their credit or incurring debt. These actions will position them for financial success.
Greenlight Unique Selling Propositions
This fintech app effortlessly provides investment roadmaps to children. The card allows them to learn about spending, saving, and even investing through a variety of learning activities.
This is the most basic subscription package, with a monthly price of $4.99. It is the cheapest option on the platform that accepts debit cards, and it is available for up to five children. The plan also includes tools to help families track their spending, earning, and saving goals.
Greenlight + Invest: ($7.98/Monthly)
The program welcomes the investment journey of the users. It is a reasonable program for household financial mastery that costs $7.98 every month. Under the supervision of their parents, children can learn and practice the fundamental investment portfolio, which starts at $1 and does not include an embedded trading charge.
Greenlight Max: ($9.88/Monthly)
The system stumbles on extra help with a monthly price of $9.98. It includes all-encompassing security that goes beyond financial supply and tools. The offer includes identity theft protection, cell phone protection, and purchase protection. It is one of the most desired subscriptions for every family.
Greenlight earns a percentage of transactions done with the Greenlight debit card thanks to a partnership with Community Federal Savings Bank. As a result, the corporation profits every time a user makes use of one of its most crucial features.
Custom Card Fee
For an extra $9.99, Greenlight provides a suite of customizable debit cards. Kids can personalize their debit cards with an image that best reflects them. This is a fun and inexpensive method for youngsters to turn their debit cards into one-of-a-kind works of art.
Card Replacement Fee
Customers will receive their first replacement card for free, but subsequent replacements will cost $3.50 per card (or $24.99 for express shipping).
In this blog we answered the question “How does Greenlight make money”, we discovered that greenlight makes money by paid subscription services based on monthly and other transaction fees based on debit card performance. The company arranges multi-level memberships and makes money from millions of users. Please feel free to comment down your thoughts and let me know if you have any questions.
Frequently asked Questions (FAQ): How does Greenlight make money
What bank owns Greenlight?
Community Federal Savings Bank
Greenlight is a legal company that provides Mastercard debit cards that parents may manage via an app. Community Federal Savings Bank, an FDIC-insured bank, issues Greenlight cards. Because of FDIC insurance, up to $250,000 of the money in your account is guaranteed if the company fails.
Is Greenlight worth the fee?
The Greenlight card might be a useful tool for parents who want to teach their children about money management. There are numerous tools, and you can easily examine what your children are doing with their money at any time. Greenlighting, on the other hand, is not free.
Can Greenlight be trusted?
It’s a legitimate product, not a scam. The Greenlight card includes an EMV chip, which helps to keep your data safe and secure every time your child makes a transaction. As a parent, you can establish spending limits that are appropriate for your child, and you’ll receive quick notifications whenever they spend money.
Does Greenlight have hidden fees?
There are no further hidden or extra expenses unless your child loses their Greenlight Card. We provide one complimentary replacement card. Any further replacement cards you require will cost $3.50 each.
How much is it to buy a greenlight card?
Greenlight costs $4.99 per family and includes cards for up to five children, with no additional usage or transfer fees.
Are Greenlight cards free?
Greenlight is free for the first month as a trial, and the monthly fee for the entire family is $4.99. Making purchases, withdrawing money from an ATM, getting a balance from an ATM, contacting customer service (automated or live agent), or incurring an inactivity fee are all free of charge.
Azevedo, M. A. (2021, April 27). Kids-focused fintech Greenlight raises $260M in a16z-led Series D, nearly doubles valuation to $2.3B. Retrieved from Tech Crunch: https://techcrunch.com/2021/04/27/kids-focused-fintech-greenlight-raises-260m-in-a16z-led-series-d-nearly-doubles-valuation-to-2-3b/
Haverstock, E. (2021, April 27). With Debit Cards And Investing For Kids, Fintech Startup Greenlight Doubles Valuation To $2.3 Billion. Retrieved from Forbes: https://www.forbes.com/sites/elizahaverstock/2021/04/27/with-debit-cards-and-investing-for-kids-fintech-startup-greenlight-doubles-valuation-to-23-billion/?sh=6355eb363aad