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Green Dot Buys Loopt

In a deal that has some Web watchers scratching their heads, Green Dot, a prepaid debit-card provider, is buying mobile location-based services specialist Loopt for over $40 million.

It’s “a move straight out of left field,” The Next Web writes. Green Dot “seems like an unlikely buyer for a company like Loopt, but [it] says it expects to put its products to good use, to improve customer acquisition and retention, drive the adoption of new banking and payment products and to become a leader in mobile wallets, rewards and payment solutions at retailers nationwide.”

“The deal comes as the war over how to lock in customers paying for real-world things from a mobile phone is heating up,” The Wall Street Journal reports. For example, “Google last year launched its wallet service that allows people to pay for goods by tapping their mobile phones at terminals.”

GigaOm’s Ryan Kim thinks “it also shows that bigger companies are realizing the value of location and are looking to innovators who can help them get closer to the ground and use local context to help improve their products,” writes

On the not so bright side, however, “It’s showing that location-based services are having a hard time making it on their own,” Kim adds.  “At this point … it’s only the latest location app to be acquired and see its own product shut down, following others like Gowalla and Yobongo,” AllThingsD seconds.

“With a new class of passive location apps on the rise, failed geo-mobile apps of the past need to cut their losses,” writes TechCrunch.

Yet, Loopt CEO Sam Altman insists that this deal is different, because of the opportunity to work with a banking company. “Many of the companies in the mobile location space are trying to figure out different way to tie what they’re doing to commerce,” Altman tells AllThingsD. “We’ve all realized the critical piece is how you tie in commerce and payments.”

 

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