How Wealthfront is strengthening its banking arsenal

Wealthfront may be one step closer to becoming a super robo.

The Palo Alto, California-based digital firm is teaming up with the banking and financial services company Green Dot to offer clients a Visa debit card and the ability to direct deposit paychecks from employers, Green Dot CEO Steve Streit said in a May earnings call.

Streit cited the successful launch of the Wealthfront cash account in February that attracted $1 billion in deposits in just a few months. The robo advisor recently upped the annual percentage yield to 2.51% one of the highest rates in the industry.

Wealthfront CEO Andy Rachleff has long sought to create an integrated one-stop-shop where a client direct deposits a paycheck and Wealtfront handles the rest.

Services include automatically paying bills, topping off emergency funds and then rerouting extra cash into brokerage accounts that track the client’s risk profile and financial goals.

Wealthfront did not respond to a request for comment or on a timeline of when the new products may be available to clients.

Green Dot already works with high-profile tech companies, including Uber, which gives the ride-hailing app’s drivers access to a debit account if they don’t already have an account elsewhere. The banking services provider has a market capitalization of $2.5 billion and trailing twelve-month revenue of $1 billion, according to data provided by the web-based research firm YCharts.

Green Dot declined to provide further information about the Wealthfront deal.

“Wealthfront now wants to do [to] banking what it did to investing and has chosen Green Dot's [banking as a service] platform as the best way to get the job done,” Streit said during the call.

Green Dot will provide a Visa debit card that allows Wealthfront banking customers to auto-pay bills and direct deposit paychecks right into their Wealthfront account all while receiving a 2.5% interest rate on their cash balance, according to the transcript.

A handful of other RIAs have offered cash and banking services in recent months including Carson Wealth. Through a partnership with the digital banking provider Galileo, Carson’s clients now have traditional bank account offerings including a Mastercard-branded debit card, online bill pay, and mobile check deposits.

Other digital investing platforms have launched cash products where clients can earn more on assets than in traditional savings account. Marcus by Goldman Sachs offers a savings account with a 2.25% APY.

Green Dot will link APIs directly into Wealthfront's “high performance” platform to create “something bespoke and special” for the robo’s customer base, according to Streit.