PerkStreet
| Company type | Private |
|---|---|
| Industry | Banking, Financial services |
| Founded | November 2009 |
| Founder | Dan O'Malley, Jason Henrichs |
| Defunct | 2013 |
| Headquarters | Boston , United States |
Area served | United States |
Key people | Dan O'Malley (Founder) |
| Products | Checking accounts, debit cards with cashback incentives |
Number of employees | 25 (2011) |
PerkStreet Financial was a virtual banking institution headquartered in Boston, established in November 2009 by Dan O'Malley, a former Capital One executive, alongside Jason Henrichs. The company provided checking accounts and debit cards featuring cashback incentives, positioning itself among the pioneering Challenger Banks, similar to later market entrants such as BankSimple (Simple) and Moven. By operating without traditional branch locations, PerkStreet was able to reduce overhead expenses; however, its cashback rewards program, which reached nearly 2% on certain debit accounts, ultimately proved financially unsustainable and led to the company's shutdown in 2013.
History
PerkStreet successfully raised capital through multiple funding rounds, including a $9 million Series B venture investment. As of May 2011, O'Malley reported that the firm had amassed a customer base larger than half of the banks and credit unions across the United States, supported by a team of 25 employees.
In August 2013, the company declared it would cease operations and terminated all personnel. O'Malley revealed that more than $4 million had been distributed in cashback rewards since the company's launch; however, ongoing low interest rates squeezed profit margins, rendering the reward structure unsustainable. Additionally, difficulties in establishing partnerships with other financial institutions compounded these challenges.
Although PerkStreet was exempt from Durbin Amendment regulations and maintained consistent debit interchange fees, it struggled to operate profitably within the prevailing low-rate environment. Customer deposits were insured by the FDIC, yet many users expressed dissatisfaction with the sudden closure and discontinuation of the cashback program.
The decision not to honor outstanding cashback balances drew significant criticism from customers and financial commentator Dave Ramsey, who had previously supported PerkStreet but later condemned both its closure and approach to handling rewards.
After shutting down, PerkStreet advised customers to reach out to their respective issuing banks based on debit card prefixes: The Bancorp Bank for cards starting with 5519 or accounts beginning with 123, and Provident Bank for those with card numbers starting at 5507 or account numbers beginning with 234. Accounts opened prior to March 6, 2013, were issued by Bancorp; subsequent accounts were issued by Provident Bank.