Debit Cards Aren’t For Stupid People: Q&A with PerkStreet CEO on Flying Into the Startup Abyss

5/24/11Follow @xconomy

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on its nose. I’d say the smartest customers in the country are using PerkStreet to buy what they’re already going to buy and get money back for it. No Visa or MasterCard in the world gives that much cash back.

And I have nothing against Capital One. Capital One is a phenomenal bank. I have a lot of respect for what they do. It’s about one of my more broad goals: I wanted to push the industry—kicking and screaming—to one that was better, more responsive, and more in tune with the lives of the average person. We’re going to see a mega shift from holding money, what banks have done, to helping people find ways to save money. I think if you’re going to have the single closest financial relationship to a person’s life, it’s an obligation.

X: How have Internet trends enabled PerkStreet to grow?

DO: I don’t think you have to look any further than Groupon, LivingSocial, and BuyWithMe to see that people want to save money. Merchants are working to put deals together to help customers save money. Why haven’t banks done that? I think the group buying trend is huge. I think the private sales trend is huge. I think the ability to take all of what we know about customers, and use that to recommend what we do, is huge. I think where the Internet is going is all about using data. We’re building some technology that brings that in front of our customer base.

X: What new products and technology can we expect to see from PerkStreet in the coming months?

DO: The ability to log on to your PerkStreet account, see all transactions, not only see all your cash back, but have another product standing by it that is constantly, on a daily basis, bringing you ways to save money. That platform, that piece of technology, we’re incredibly excited about.

We’re coming out with other financial services products, ways to earn cash back. A savings account, which will probably be the first thing we launch. The hard thing every month is putting more money into a savings account. What if we gave you cash back for … Next Page »

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  • Gerrit Bradley

    I wish more mechanics of the business model were discussed. After reading the fine-print for PerkStreet and their rewards it appears that you only get cash-back when you use your debit card as a credit card. When a customer completes a transaction this way the merchant pays a much greater fee (based on percentage of sale), as opposed to the customer who types in their debit card number (flat fee). Congress is trying to reduce the fees charged merchants when customers unwittingly use their debit card as a credit card. Banks are all to happy to give back fees collected from merchants. Yes PerkStreet is the best at giving back the most money, but what really is happening is a transfer of costs from a merchant and their other customers to the rewards program of PerkStreet and other banks. If my understanding is wrong please detail how, and explain why there is so much lobbying by the banks to prevent Congress from reducing fees related to debit cards.

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