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NEDeals said:   jamesboy said:   NEDeals said:   jamesboy said:   

They didn't run out of money. New government regulations on debit card fees have made them unprofitable for banks. They will also need to serve multiple networks. Congress basically voted to crush the business model in a bid to support big retailers.


Their recent tweets indicated that they do not have enough money to pay the outstanding rewards and are apparently using the cash on hand to wind down their operations rather than paying any more rewards.

Per their 3/31 call report they had over $1 billion in cash and over $4 billion in total assets. They had $347 million in capital. The bank continues on with plenty of cash. The perkstreet venture is the only piece going away. You might want to tweet them back and ask.


Jamesboy,
Do you have a reference for PerkStreet's "3/31 call report" that you mentioned? It is interesting that a private firm backed by Venture Capital would have such a report as you suggest. The publicly announced VC totals are far below $1 billion.

Where did PerkStreet say that their billion in funding came from in the report you mentioned?


They were referring to the custodians assets(not their own). That is the only answer that makes any sense.

NEDeals said:   jamesboy said:   NEDeals said:   jamesboy said:   

They didn't run out of money. New government regulations on debit card fees have made them unprofitable for banks. They will also need to serve multiple networks. Congress basically voted to crush the business model in a bid to support big retailers.


Their recent tweets indicated that they do not have enough money to pay the outstanding rewards and are apparently using the cash on hand to wind down their operations rather than paying any more rewards.

Per their 3/31 call report they had over $1 billion in cash and over $4 billion in total assets. They had $347 million in capital. The bank continues on with plenty of cash. The perkstreet venture is the only piece going away. You might want to tweet them back and ask.


Jamesboy,
Do you have a reference for PerkStreet's "3/31 call report" that you mentioned? It is interesting that a private firm backed by Venture Capital would have such a report as you suggest. The publicly announced VC totals are far below $1 billion.

Where did PerkStreet say that their billion in funding came from in the report you mentioned?


Bancorp Link

Remember Bancorp receives the income generated from your swipe, not Perkstreet. That fact should be considered in the discussion. Think of it as accelerated volume on swipe fee income without the need to pay rewards. Sweet deal for the bank.

So perkstreet is no more ...

Are there any good PerkStreet replacements / PerkStreet Alternatives?

Always thought they were a little fishy as their was another bank that was actually a custodian. Anyway, I felt that Rewards checking accounts were a better deal anyway.

mlkrgr said:   Always thought they were a little fishy as their was another bank that was actually a custodian. Anyway, I felt that Rewards checking accounts were a better deal anyway.

No it was actually quite brilliant actually because it allowed them to carve out a very profitable part of the banking business while excluding a lot of the more costly elements of their business.

1) The bank has to pay for it's real estate, teller, loan officers, etc.
2) The bank has to pay for the costs of dealing with regulators
3) The bank has to comply with the CRA requirements and make often times unprofitable loans
4) Banks often provide loss leaders like free checking(when they already have enough deposit financing).
5) Banks have capital requirements and are extremely costly to start up.

Perkstreet came in and found the one area that was most profitable for banks(merchant fees) that was contributing the most to banks contribution margin and indirectly subsidizing the a lot of the banks other operations. They figured out that they could just offer this service and use a bank as custodian.

It was a brilliant move until Dodd Frank partially killed the business model and then a court case officially killed the business model(assuming the retail industry wins the appeal as well).

carbonfiberhoodscom said:   So perkstreet is no more ...
Are there any good PerkStreet replacements / PerkStreet Alternatives?

Yea, just use a rewards credit card, a reputable bank that gives competitive interest on your deposits, and don't buy-in to pre-paid debit cards that say they are checking or savings accounts.
If you like risk, you could search and read about MangoSavings and MangoMoney Prepaid Card; run by MangoFinancial, began 2008 in Austin,TX and funded by MPower Ventures, billionarie Red McCombs and Omidyar Networks. Their prepaid debit cards currently issued by First Bank and Trust, Brookings, SD.

jamesboy said:   NEDeals said:   jamesboy said:   NEDeals said:   jamesboy said:   

They didn't run out of money. New government regulations on debit card fees have made them unprofitable for banks. They will also need to serve multiple networks. Congress basically voted to crush the business model in a bid to support big retailers.


Their recent tweets indicated that they do not have enough money to pay the outstanding rewards and are apparently using the cash on hand to wind down their operations rather than paying any more rewards.

Per their 3/31 call report they had over $1 billion in cash and over $4 billion in total assets. They had $347 million in capital. The bank continues on with plenty of cash. The perkstreet venture is the only piece going away. You might want to tweet them back and ask.


Jamesboy,
Do you have a reference for PerkStreet's "3/31 call report" that you mentioned? It is interesting that a private firm backed by Venture Capital would have such a report as you suggest. The publicly announced VC totals are far below $1 billion.

Where did PerkStreet say that their billion in funding came from in the report you mentioned?


Bancorp Link

Remember Bancorp receives the income generated from your swipe, not Perkstreet. That fact should be considered in the discussion. Think of it as accelerated volume on swipe fee income without the need to pay rewards. Sweet deal for the bank.


Your link is for the FDIC status of Bancorp. My question was not about Bancorp, it was about PerkStreet Financial. Bancorp is one of the banks that PerkStreet partnered for deposit banks, but Bancorp is not PerkStreet Financial. What is your reference that PerkStreet Financial has "over $1 billion in cash" as you claimed in reference to my comment that PerkStreet does not have enough cash to pay outstanding rewards?

NEDeals said:   jamesboy said:   NEDeals said:   jamesboy said:   NEDeals said:   jamesboy said:   

They didn't run out of money. New government regulations on debit card fees have made them unprofitable for banks. They will also need to serve multiple networks. Congress basically voted to crush the business model in a bid to support big retailers.


Their recent tweets indicated that they do not have enough money to pay the outstanding rewards and are apparently using the cash on hand to wind down their operations rather than paying any more rewards.

Per their 3/31 call report they had over $1 billion in cash and over $4 billion in total assets. They had $347 million in capital. The bank continues on with plenty of cash. The perkstreet venture is the only piece going away. You might want to tweet them back and ask.


Jamesboy,
Do you have a reference for PerkStreet's "3/31 call report" that you mentioned? It is interesting that a private firm backed by Venture Capital would have such a report as you suggest. The publicly announced VC totals are far below $1 billion.

Where did PerkStreet say that their billion in funding came from in the report you mentioned?


Please refer to the thread for more information. If you want to PM me I can give you a more detailed explanation. No point in rehashing all of this again IMO.

Bancorp Link

Remember Bancorp receives the income generated from your swipe, not Perkstreet. That fact should be considered in the discussion. Think of it as accelerated volume on swipe fee income without the need to pay rewards. Sweet deal for the bank.


Your link is for the FDIC status of Bancorp. My question was not about Bancorp, it was about PerkStreet Financial. Bancorp is one of the banks that PerkStreet partnered for deposit banks, but Bancorp is not PerkStreet Financial. What is your reference that PerkStreet Financial has "over $1 billion in cash" as you claimed in reference to my comment that PerkStreet does not have enough cash to pay outstanding rewards?

yes i totally agree, I have make about $1200 cash-back once they are available i redeem them, i feel sorry for those who had about $900 lol all gone, my last perks was about $15

NEDeals said:   Your link is for the FDIC status of Bancorp. My question was not about Bancorp, it was about PerkStreet Financial. Bancorp is one of the banks that PerkStreet partnered for deposit banks, but Bancorp is not PerkStreet Financial. What is your reference that PerkStreet Financial has "over $1 billion in cash" as you claimed in reference to my comment that PerkStreet does not have enough cash to pay outstanding rewards?
You're right, NEDeals; jamesboy is referring to the custodian bank. Perkstreet Financial is a private company, and never disclosed their financial statements. They were a tech firm in Boston that provided tech, customer service, socialmedia banking, and perks for customers who open and used a checking account with the debit card. Deposit accounts were held at The Bancorp--a big firm in custodian accounts for health savings and prepaid-debit cards accounts, or The Provident Bank NY. The debit cards were issued from 1 of these banks.

Perkstreet probably lost revenue and money through the years and had high operating costs. They relied on profit sharing with their partner bank or merchants; I think it's from 1) debit card transactions (merchant fees), 2) affiliate partner programs (the ads to use the debit card at specified merchants each month for better perks, and the giftcard offerings from perk merchants), and 3) the $amount deposited that earned no interest to customers. The CEO said they had processed ~$500 million per year in transactions. CEO wont say how many accounts; but, they had ~14,500 likes on Facebook. maybe less. The only cash was the $15 million they got from VC and private investors from few rounds of funding in their first 3 years, and any general funds from revenues. They probably have enough cash to close the business by paying the electric and severance.

Went with Kasasa , I will update how it goes.

So winter, to you it's fine that you have something of yours stolen as long as it's by a business. This is wrong whether it is done by a person or a business. How about I set up a "business", get you to give me a bunch of your money, presenting my company as a safe place for your money, then I'll tell you I'm going out of business and you have lost your money to me. Ha Ha


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