they're acting as their own simple bank. you give them money, they give you a debit card and a slick UI to track your money.

when you give them money, they give it to another bank, who they have probably negotiated some sort of deal with. banksimple gets a decent kickback on deposits or debit card transactions in exchange for dealing with everything from fees to customer service.

or at least, thats what it sounds like based on what i've read