Last week GreenDot’s IPO was rumored in question.  It could be due to interchange changes or concentration risk.  In either case, GreenDot’s relationship with WalMart is pivotal and not always aligned.

First, interchange: Given GreenDot reports 30% of its income derives from interchange fees, the pro-retail pending interchange legislation might materially effect their bottom line.  What is good for WalMart (lower interchange) is bad for GreenDot (lower interchange=lower profits).

Second, concentration risk: WalMart represents around 60% of GreenDot’s business.  It would be reasonable for WalMart to want economics in the IPO. And yesterday it was announced that WalMart would be issued over 2 million common shares GreenDot as part of a renewed 5-year agreement.  It represents less than 1% ownership so likely sends more of a message than actually providing WalMart material gain.

If I were WalMart, I would demand further “alignment.”