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Green Dot Corporation (NYSE:GDOT)

JPMorgan Ultimate Services Investor Conference

November 14, 2012 2:45 PM ET

Executives

Chris Mammone – IR

Analysts

Tien-tsin Huang – JP Morgan

Tien-tsin Huang – JP Morgan

Are we ready to go? All right. Thanks, everyone, for joining. I’m Tien-tsin Huang. I cover Computer Services IT Consulting. So sticking with merchant services we’ve got Green Dot next up to present. We’re going to do a fireside chat. From Green Dot, we’ve got Chris Mammone, he’s from Investor Relations.

And so obviously a lot to talk about in the prepaid space. Didn’t want to get too hung up on some of the detailed details, but I thought we could just start up with, if you don’t mind, Chris, just talking about how you see the GPR, this whole prepaid market evolving in terms of distribution, economics. There is a lot of new players, some old players; I’m sure we’re going to see some consolidation down the road. But maybe we’d just start, how do you see it playing out?

Chris Mammone

Sure. Thanks, Tien-tsin. I think that you’ve got a few thing driving it. I think mobile is an important topic, just as it is across the payments landscape. I think mobile will continue to be an important component with this industry as well. And I think that today, for example, we run a lot of GPR cards acquired via mobile phone, and I think that will change rapidly going forward. And that I think also would extend to basic checking accounts, which is another area that we’re focused on beyond GPR in the next few years. So, I think mobile.

I think to your point about players, I think that, yeah, you’ll probably see fewer players, stronger players if you look several years down the road. And I think that – but I think there’ll continue to be increasing needs for these – for prepaid and basic banking accounts in general.

Tien-tsin Huang – JP Morgan

What about just distribution? I know that’s evolving a lot. You’ve got Chase obviously distributing Liquid through their branches. You’re getting a little bit more crowded, products sitting on – at the retail location. How do you see distribution changing?

Chris Mammone

I think that retail and cash reloading actually will continue to be important drivers of the space for the long-term. I think that, yes, the retail space is getting increasingly crowded. I think that there has been recognition that certain categories of retail, being mass market, and mass market retail, pharmacy, being particular channels that are very instrumental in driving account acquisition for prepaid. And so I think that those will continue to be important components.

Tien-tsin Huang – JP Morgan

How about just – obviously the fee question is an important one. Bluebird being pretty aggressive with their pricing. Aside from that, you’ve had a lot of success winning despite having amortized higher prices – at the rack rate level obviously some are free as you qualify as a more frequent usage. But talk to me about fees, like I don’t think you believe or agree that this is going to become an interchange model only down the road. But how do you see this – the fee economics changing?

Chris Mammone

Well, we think fees are certainly an important factor driving consumers’ choice choosing which product to adopt, which product to try out. I think that there are other important factors as well. In fact, I think fees and pricing is one of four important factors. So the others would be brand, features, and convenience or availability. So I think that Green Dot does a good job in all four of those areas really.

First, on brand, we have the number one brand in prepaid. And in reloadable prepaid, we have the highest brand awareness; I think in our research, I guess over 60%.

Both on the fee side and on the feature side we really designed our products to be the lowest cost and the most feature-rich for the type of use cases that we think are most prevalent for these products. And we’ve been at this as long as – we sort of credited with inventing the space 12 years ago. And so, we understand this consumer group the best. And so we’ve designed our products, both from the fee and the feature standpoint, to be as low cost as possible for how we know these customers like to use the product.

And then availability and convenience. We have the largest reload network in the country. We have 60,000 locations that are basically on every street corner of America really overlapping where 97% of Americans shop. And often times these locations are open 24 hours a day. So, consumers can come in and pick up a prepaid card at any time and they can reload their card at any time.

So we think that we – we think we’re on the leading edge in all those areas.

Tien-tsin Huang – JP Morgan

Yeah. So I guess we’ve had now a couple of case studies. You talked about it a little bit, but maybe if you can elaborate on it, Chris. Just exclusivity expiring, competition coming into a couple of your distributors, yet the performance has actually been quite good, surprisingly good in my mind. So why do you think that is? Is it – you talked about the four reasons, and I agree, but is it more just the placement of the product, is it the brand? Obviously it’s not the fee. So maybe if you can just talk to those two for us, I think that’d be helpful.

Chris Mammone

Sure. So I think – yeah, I mean, if we looked back about 12 months, four of our top five retail distribution partners were exclusive, governed by long-term contracts, and now today, really only one of those top five are still exclusive. And it’s tough to say. I mean, we shared a few data points on our last call, suggesting that, in a case of like a Walgreens, for example, our activations were up 40% year-over-year during the time that the new competitors were introduced on the shelves there. Another of our major retailers where we’re one of five products on the shelves, growth in activations was still up in the 5% to 10% range. And even Wal-Mart which introduced the Bluebird product in mid-October, during the two – the first two weeks that Bluebird was on the shelves next to Green Dot, our activations were off less than 10%.

So I guess one takeaway from all those data points is that results are varied very early on in any competitive format. So, still too soon to make any discernible calls either way.

But I’d say overall results are encouraging. And I think it does speak to those different components beyond price, so, it’s a brand, so it’s the features, to convenience. And I think, again, Green Dot drives the category.

In the case of Walgreens, they put their new display together that basically has three brands. If you were to look at the display, there are six rows of prepaid cards. At the top four rows are all Green Dot products, row five is a product by AmEx and row six is a product by PayPal, NetSpend. And so I think that was Walgreens’ decision to set the display up that way, and I think it’s evidence that they view Green Dot as the brand that really drives the most traffic and drives the most account acquisition for the category, so...

Tien-tsin Huang – JP Morgan

Yeah. So obviously we’re going to keep watching that. But everybody is obviously focused on Bluebird and Wal-Mart. I mean, I’ve seen it, tried it; you walk into the store, it’s got a nice, pretty large presence when you walk in in terms of the spin rack, and then you’ve got – I think you’re going to be in every other lane against Bluebird. So we’ll see how that goes. I mean, to the extent you can give us an update, that’s great, but I wouldn’t expect it. But my question really more is, how much of it do you think is overlapping versus different customer base that Bluebird is going after? And then I have a follow-up to that.

Chris Mammone

Sure. I mean, it’s interesting. AmEx and Bluebird when they held their public call to announce the launch of Bluebird, they really talked about – I think they borrowed some of the terms from the FDIC study about the different categories of underbanked and they really talked a lot about the unhappily banked segment, which could be as many as 80 million, 90 million people in this country.

It’s really the people that still have alternatives; they’re engaged with a bank, but they’re unhappy with their banks, mostly due to fees, surprise fees, overdraft fees and penalty fees and the like, and they sort of have a step – one foot out the door of that bank looking for a better alternative, but in their minds no alternatives exist. Prepaid really isn’t an alternative in the minds of these people, but they are looking for something else.

And so I think Wal-Mart and AmEx – and of course it’s a better question for them, but they’re really excited about the opportunities that Bluebird has to potentially target that group of, in a broader sense, the underbanked or underserved or not well served. So they very well may have a big hit on their hands with it, because we think there – we would agree there probably is a gap in the marketplace for that.

Yeah, to your question about the placement of Bluebird in the stores – and that’s something that is – it’s a big reason behind us cutting our growth expectations because, yeah, we were taken out of every other checkout lane. So where we used to be in every checkout lane at Wal-Mart, now we are in alternating lanes with Bluebird in one, Green Dot in the next, Bluebird on one, Green Dot in the next. So, we’ll have to see how that plays out. But that’s a big reason for the uncertainty over the near term over what it can mean to our account activations.

Tien-tsin Huang – JP Morgan

How big a deal is it to have the FDIC insurance on the Wal-Mart MoneyCard powered by Green Dot versus Bluebird, which is not FDIC insured?

Chris Mammone

I think that as far as consumer protections, I have no doubt that AmEx would be able to – would have the resources to provide the same protections to an end user. But as far as the FDIC label, there are implications for government benefit loading onto the products, and our understanding is that if an account is not FDIC insured, one cannot have government benefits loaded onto those cards or if one were an employee of a government agency, probably wouldn’t be able to have payroll loaded onto those cards, for example. So there are some subtle differences there.

Tien-tsin Huang – JP Morgan

Right. And then I guess the other difference is merchant acceptance. AmEx is obviously lower than Visa and MasterCard. I don’t know if you’ve studied it, but the average – the MoneyCard user, are they shopping locally? Is there any way to sort of back test whether or not the lower merchant acceptance actually could result in a lower – or less attractive customer experience for the Bluebird user?

Chris Mammone

It is tough to say. But, I mean, maybe another – maybe to underscore the point that we think Bluebird – we would agree with Wal-Mart and AmEx that Bluebird is really after a different segment within the underserved. I mentioned earlier that the unhappily banked are typically people that still have other alternatives available to them.

A lot of our prepaid customers, a lot of the people that have been attracted to our prepaid cards over the years, and the Wal-Mart MoneyCard in particular, are people that are sort of out of alternatives. If you think of people that have had credit cards in the past or bank accounts in the past that have gotten in trouble with those cards or those accounts and run up – written too many bad checks or gotten in trouble with their credit and now are sort of prohibited from opening a checking account or opening a new line of credit, they turn to prepaid because there is no credit check required; you basically – as long as you’re not an identity thief you can get an account and you can manage your money that way and basically have a basic bank account through prepaid. And those are our bread and butter customers.

Tien-tsin Huang – JP Morgan

Yeah. Well, I think you guys have said it, and others have as well, the different industry comps that have gone to – the good thing is that a lot more awareness, right, a lot more advertising is going to get shown here on the prepaid side. So two questions there. Do you think it’s going to sort of swell up the pie and build up awareness and it’s going to be a rising tide situation – ignoring share shift, talking about the category? And then the second thing is, does Green Dot need to step up their advertising?

Chris Mammone

Yeah, I mean, we think that awareness is – probably hasn’t grown as fast as it could have over the past few years. It’s still low. So we think product proliferation will certainly help in that regard, and we’re seeing it certainly. And we do think that, yeah, stepped up advertising industry-wide will help, and we’ve seen the marketing blitzes by both Chase and AmEx supporting Bluebird. So we do think that that will sort of be a rising tide that lifts all boats.

And for Green Dot, we’ve invested in the brand over the years. We expect to continue to invest more. Again, as long as we achieve a positive IRR from our marketing spend, it will continue. And actually to that point, we’re running currently our best TV advertising campaign to-date, so, very pleased with that and expect that to continue. So, yeah, more marketing.

Tien-tsin Huang – JP Morgan

Is there a risk that we see a big step function up next year or the year after in terms of advertising, and do you see a need for that?

Chris Mammone

No, we’re not really commenting on 2013, so no specific color there. But again, as long as – we always measure lifetime revenue versus the cost to acquire a customer, and as long as the former exceeds the latter by multiples, we’ll make those investments.

Tien-tsin Huang – JP Morgan

Okay, good, good. So I think another change that you guys had talked about in the past was changing your fraud measures and being, obviously, more disciplined and more rigorous there. What does the average customer now look like as a result of some of these changes that you’ve put in?

Chris Mammone

The biggest change that we’ve seen is we have a lot fewer customers that are attempting to open an account for a one-time disbursement, typically of a tax-free fund. So and you can sort of see the effect of that in some of the underlying metrics in the portfolio. For example, in the third quarter, our card churn was down year-over-year by about 80, 90 basis points. Our average revenue per user was up. So we’re seeing some positive byproducts of that and we’re certainly happy with the risk measures that we’ve been putting into place.

Tien-tsin Huang – JP Morgan

Right. So is this sort of I guess maybe a stepping stone to providing this mobile checking account, which is I know something you’re going to rollout more aggressively next year? What does that look like, Chris, and what’s the timetable for the launch?

Chris Mammone

Sure. So we’re not – we’re unfortunately unable to share a lot of specifics around it at this stage. But we’re currently in beta testing of the product with employees of Green Dot. We hope to in the coming months have a more formal unveiling of the product and share it with all of you. So stay tuned there. But we’ll continue to test it, beat it up and provide feedback and sort of perfect it before we roll it out to the marketplace. But we really are excited about the opportunity to provide a basic checking account maybe similar to what more what Bluebird is after to target more of that unhappily banked segment within the broader underserved and underbanked.

Again, there are tens of millions of people that heretofore just haven’t been sort of open to adopting prepaid. We think that maybe we can meet them halfway with a more basic checking account that is very modern and sleek and user friendly and may be particularly attractive to younger consumers and millennials, and we think it will be a big initiative in 2013.

Tien-tsin Huang – JP Morgan

Is this where it’s all going? If were to rewind and look at you all buying a bank or getting a bank, buying Loopt, getting bigger on mobile, is the bet here that we’re just going to see this convergence of prepaid with mobile and getting out of the branch and putting more of the transaction services, the bank services onto the phone? Is that where it’s all going?

Chris Mammone

We do think that a lot of that is evolving toward mobile. I guess, I mean, personally I think payments with a mobile phone may be one of the latter stages. I mean, it’s all evolving, but maybe that’s one of the latter stages of the evolution. But certainly things like bill pay and P2P and account management, remote deposit capture, that’s all happening at a very rapid pace today and involving very quickly, and I think that prepaid certainly is as good a candidate for all that all to evolve quickly as well.

Tien-tsin Huang – JP Morgan

All right. So what’s – so just going back to the bank, I mean, what’s the benefit of owning the bank? I know a lot of your non-bank peers obviously don’t have that or aren’t going down that path, but what’s sort of the sizzle there?

Chris Mammone

So we really think there are many strategic and financial advantages of owning a bank. In the old way of doing things, issuing our cards through third-party banks, we were always very limited in what we could rollout as far as new features or new products or even changing terms and conditions on existing programs. All those changes had to go up the chain of command at the issuing partner and really the issuing partner had veto power over anything we’d want to do. So again, so a bit – we had the handcuffs on us a bit from a product innovation standpoint through issuing via third parties. And now, owning our own bank, we don’t have those same restrictions; we have much more flexibility and convenient number one product innovation.

Regulatory compliance is another key strategic reason – or sort of streamlining of our regulatory compliance. Again, when you issue through third parties you’re beholden to whatever those regulators of those institutions believe about prepaid. And there have been instances in the past where program managers that issued through third parties had to hold off on growth or had certain aspects of programs prohibited. There were some high profile examples with MetaBank and with Bancorp in the past.

So issuing through our own bank, we have a direct connect to our regulators, which is the Federal Reserve. We basically have an open dialogue with them and know what they’re thinking at any time. And they basically blessed our five-year business plan when they approved our bank charter a year ago.

So those are some of the key strategic reasons. Financially, again, when you issue through a third party you pay third-party issuance fees that are variable costs, they tend to rise along with volumes, both card issuance volumes and load volumes, and those can rise faster than revenues actually in many cases. So what we’re doing with issuing out of our own bank is we’re taking out variable cost that grows rapidly, converting that into a much lower fixed cost base that really doesn’t grow the scales with our volume. So that will be advantage that will be more transparent over time as more cards are issued out of our bank. And then we’ll have the ability to earn some float income as well.

Tien-tsin Huang – JP Morgan

Remind me this of the capital requirements associated with owning the bank.

Chris Mammone

Sure. So we agreed to – the key ratio to track is Tier 1 leverage, and we’ve agreed to a 15% leverage ratio on that front. So I think that as of the third quarter we were well above those minimums. And as we announced on our call, we had about $225 million over and above the amounts required to be held at the bank level.

Tien-tsin Huang – JP Morgan

Right. So in terms of your – the freedom to repurchase shares, what’s the current status of that?

Chris Mammone

It’s been a topic of discussion with the board, and at this point in time the board has concluded that there are other potential uses for the cash that should take precedence over a buyback. We would prefer mergers and acquisitions should they make sense. There may be opportunities to issue other programs out of Green Dot Bank that would require further capital infusions into the bank. So and we really want to keep the bulk of our powder dry for those types of opportunities that we think do a much better job of driving long-term growth in this business, and we think we’re very early on in our opportunity. So that’s sort of where we stand there. Just as a side note, our CEO actually purchased stock last week.

Tien-tsin Huang – JP Morgan

Yup, yeah, we saw that. Right, let me stop there and give folks a chance to ask questions from the audience if there are any.

Chris Mammone

Yeah.

Tien-tsin Huang – JP Morgan

If you don’t mind actually using the mic, he’s coming to you.

Question-and-Answer Session

Unidentified Analyst

Thank you. Okay, I understand the difference between the Wal-Mart card and your card. But what’s to stop Wal-Mart from deciding just to sell their card or putting you in every fourth lane?

Chris Mammone

Wal-Mart does have the ability to do what they please with placement. I think that what would lead us to believe that they would continue to feature the MoneyCard prominently in their stores is that it’s a long-term, very successful program. We’ve been partners since 2006. And it’s actually the premier program in the GPR industry. It’s definitely – sort of do the math, a couple of million accounts, active accounts in the marketplace today. So it’s a very successful, profitable program for Wal-Mart Financial Services. And in their call to introduce the Bluebird card with American Express, they were very supportive of the ongoing growth of the MoneyCard program. So we continue to be excited about that partnership.

Unidentified Analyst

Just a question in terms of the fees. I mean, in no industry that you’ve seen where there is no barriers to entry, when a new guy comes in with lower pricing that the incumbent does not reduce pricing. So by law of just big numbers, you would have to (inaudible). Are you setting yourself up for investors just to knock you on the head again when you actually do that, or is it better off saying that, yes, this is likely to happen, or do you have something else in terms of fees that you can bring it where – how do we look at this?

Chris Mammone

So I guess I would say that, as far as the fees go, we’re very confident that we’ve designed a product that has the lowest fees for the type of usage that we know this group of consumers value the product for. About 15% to 20% of our active cardholders actually achieve fee waivers, and we offer many fee waivers. So that’s an important component that provides evidence that we’re among the lowest cost, if not the lowest cost, for the avid users within the industry.

I would say that – we have actually been experimenting with some pricing tests. We had a zero dollar upfront fee test running at some of our retailers earlier this year. And I mean, I guess the distinction there is it wasn’t necessarily in response to what any competitors were doing, but it actually was looking at the fact that we still do have low awareness in the category, we have low adoption in the category and we are really looking for ways to remove any barriers to entry into the product. And if that upfront fee, which could be as high as $4.95 at some of our retailers – if that’s a significant barrier to someone wanting to try out and ultimately like and adopt the product, then we definitely want to see what we can do to remove those barriers, so...

Tien-tsin Huang – JP Morgan

Yeah, Reggie?

Unidentified Analyst

Hey, Chris. I guess two quick questions. Number one, is there an opportunity medium term, maybe longer term to work more closely with prepaid wireless companies to market to their customers? And maybe could we see an app one day where it comes ready installed on some of these newer phones? And then I have a follow-up.

Chris Mammone

Sure. Hi, Reggie. Potentially. I mean, I think one of the interesting aspects to the recent acquisition that we made with Loopt earlier this year was they had some preexisting relationships with some of the telco carriers. So, yeah, there could be potential to enter into partnerships where a mobile phone comes preloaded with an app to either acquire a GPR account or to acquire a basic bank account. We are definitely looking at those types of opportunities. Was there another part to that question or...

Unidentified Analyst

Well, it’s a separate question.

Chris Mammone

Yeah, then follow up.

Unidentified Analyst

Thanks for that. On the check product, does that introduce (inaudible)?

Chris Mammone

Yeah, we’re – again, we’re sort of going to wait to really share a lot of details on that product. Certainly the fee structure, we’re still finalizing that. I mean, one assumption is that we should be able to drive some incremental interchange revenue out of it, for example. But as far as the fees, we’ll have to wait until the more formal unveiling. As far as risk, I think I’ll just defer that to a later date.

Tien-tsin Huang – JP Morgan

Anyone else?

So, Chris, talk to us about the reload network. I think that’s gotten lost a little bit, and actually a lot of your competitors obviously use that reload network. So strategically, what’s the value there and how can you monetize that better?

Chris Mammone

Yeah. So you see the reload revenues, which are really the cash transfer bucket, are about 30% of revenues today. Continues to be the fastest growing source of revenues, and very consistently the fastest growing source. Third quarter was up another 20%.

And we have that third-party business as well. So the Green Dot Network by far drives the most reload transaction volume in the industry, it drives the most foot traffic into the retail locations that are integrated with the network. And for the past several quarters, our third-party volume, which are the non-Green Dot programs that actually load over the Green Dot Network, actually have been growing in the 65% to 70% range year-over-year. So that’s something that is a big differentiator for Green Dot and something that we monetize where others really do not. So, yeah, it is an important differentiator.

Tien-tsin Huang – JP Morgan

I guess Wal-Mart also has sort of developed its own, I guess whatever you call it – in-house reload network. Obviously it’s more in-store, on us kind of thing. But my question is how easy is it to replicate something like this?

Chris Mammone

So what Wal-Mart did, they introduced a program called Rapid Reload. And so they basically integrate – so they’ve had the Green Dot Network integrated since 2006. They added another reload network from InComm called Vanilla Network and – actually two others. There is the Vanilla Network from InComm and there is also the First Data Money Network. They actually have a payroll card, Wal-Mart does, that First Data manages, so now consumers can top-up those cards with cash at the POS via First Data’s rail. And I think that’s the – so that’s the main program that First Data will process. And then probably – the main program that Green Dot has not reloaded over time has been the NetSpend program and I guess their Family program.

So I think what Wal-Mart is doing is adopting a come one, come all attitude to swipe, reload at the point of sale. And so, they can get most of the industry through the Green Dot rail, but the few programs that they can’t get through the Green Dot rail they’re now getting through the InComm rail.

Tien-tsin Huang – JP Morgan

Right. So do you see competition stepping up on the reload side as a result? Is this just sort of a precursor for more to come?

Chris Mammone

It’s been an asset that most new entrants into the card issuing side have been hesitant to replicate. Even AmEx which has made a big push into prepaid with – beyond Bluebird, actually, a family of other prepaid products – has leveraged the Green Dot Network for loading some of those programs. So AmEx hasn’t shown a willingness to try to replicate a reload network. MasterCard actually has their rePower network, but that’s really the Green Dot Network that is rebranded for them, so it’s more of a partnership with even a behemoth like MasterCard.

So there are couple that are in the market today. Again, I mentioned InComm, there’s another company, Blackhawk, that has a reload network. But I don’t think you’re going to see the same proliferation and new entrant activity on the reload side that you’ve seen on the card management side.

Tien-tsin Huang – JP Morgan

Yeah. Any other questions?

I got two or three more. So I know Green Dot sort of moved away from the tax business, right, sort of shied away from payroll as well. What’s sort of, I guess, the rationale there? Is it just looking for a longer life average life customer? What’s sort of the – why are you leaving that on the table I guess is the question.

Chris Mammone

So we still do like tax and we still drive a lot of tax refund volume via the Wal-Mart MoneyCard and via the Green Dot branded cards. Payroll, I would agree with you, it hasn’t been a strategic focus. We do manage the Rite Aid payroll program, but that’s sort of a one-off.

But, yeah, I mean, we’re definitely interested in longer duration relationships. We’re trying to drive better direct deposit adoption within our family of programs because we find that someone that adopts direct deposit is multiple times more profitable than someone that doesn’t. So I think that tax will continue to be an important part of the business though. Again, a lot of our risk measures and controls our focused on weeding out any illegitimate activity on the tax side. And the payroll side, I think it will still be a sort of a case by case basis. There might be some programs that make sense, but it won’t be a strategic growth priority.

Tien-tsin Huang – JP Morgan

Okay. Just a couple of more. I know that last quarter you announced a bunch of renewals with some of your distributors. Any change in terms there, commissions, et cetera worth calling out?

Chris Mammone

Nothing dramatic, no. We renewed contracts with CVS, with 7-Eleven and with The Pantry on multiyear terms. But, yeah, there is nothing – nothing really dramatic changed on the terms.

Tien-tsin Huang – JP Morgan

Okay. So I’ll let you go on this question. Just if you’re thinking about distribution in general, are there any sort of untapped areas that maybe we’re not focusing enough on? What sort of gets you excited, Chris, and the rest of the team? I mean, one area that I think about and that I’ve talked to you guys about a lot is just all these different wallets out there all have sort of a prepaid element to it. I mean, you name the wallet, and there is a prepaid thing beneath it. So why wouldn’t that be a growth area?

Chris Mammone

It may be. And I think that, again, back to the mobile topic, yeah, I think today there is not a lot of account acquisition driven via the mobile channel and I think that could change rapidly. And perhaps the successful mobile wallet solutions that take hold help to foster that.

We didn’t – I don’t think we mentioned higher education. That’s another important distribution channel for us. And on that front, we did announce a partnership with Sallie Mae to introduce a disbursement product/basic bank account for college students. And we’ll be out in the marketplace with that offering in early 2013 and hopefully ramped up and in full swing in time for the fall enrollment season.

So those are a couple of areas that spring to mind.

Tien-tsin Huang – JP Morgan

Right. So education would be one. How about like just social media, some of these other – some of these areas? I’m just curious if there is a pipeline of things that are out there.

Chris Mammone

I think that’s all fair game as well. I think that – one other thing that excites us – many things excite us about our Loopt acquisition earlier this year, but it really gives an entrée into the whole Silicon Valley world. The team that we bought up there, and the CEO in particular, has great connections and contacts with Silicon Valley. So it’s opened a lot of doors for us already. Can’t get into more specifics now, but we’re very excited about a lot of new relationships that we’ve been able to make because of that acquisition.

And then retail will still be an important driver. And there are certain segments within retail that perhaps could adopt prepaid, like home improvement hasn’t really adopted prepaid in a big way. And there’s some other interesting opportunities out there.

Tien-tsin Huang – JP Morgan

All right, great. Chris, it’s always good to see you. Thanks for coming.

Chris Mammone

Thanks, Tien-tsin.

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