When Chime’s Co-founders Chris Britt (CEO) and Ryan King (CTO) first set out to start a web bank, it was with one idea in mind: offering middle-class consumers a good deal. It was something that was surprisingly hard for them to find in mainstream banking.
Unbanked and underbanked consumers, Britt noted, have products like Green Dot tailored to their needs – offerings that were “really not a full-featured bank account,” but that provided requisite digital access for those who couldn’t get a regular bank account for whatever reason. But, he realized, there are plenty of customers who can get bank accounts pretty easily, but can’t afford to maintain an account at a more traditional bank.
King and Britt launched Chime in 2014 to address that underbanked segment. By 2016, Chime was in the market with the full suite of features that digital banks offer today. As a pure-play digital bank, Chime offers as its primary product an entirely mobile/digital banking application that gives customers access to a network-branded debit card and a savings account. Chime also provides its customers with access to a network of roughly 40,000 free ATMs nationwide.
Chime also offers tools that are particularly appealing to younger banking customers, such as automatic savings pushes that instantly round up purchases to the next dollar (a la Bank of America’s Keep the Change program) and options to automatically deposit 10 percent of the customer’s direct deposit payroll into savings. Chime also offers no-fee paycheck advances that make funds available to workers as soon as the deposit is initiated by the payroll provider and the bank is alerted. It’s not really a risk to them, of course, since there is certainty of good funds from the employer – Chime is just making access to funds available to consumers 24 hours before they are cleared and settled.
The brand has been popular with young professionals. At the start of 2019, Chime reports roughly two million active bank accounts on its platform. On average, it has opened an additional 150,000 new accounts per month for the last 12 months, and processed about $10 billion in transaction volume across its cards. The firm was valued at $500 million as of its last funding round.
The next phase for Chime in 2019, according to Britt, will be to expand into credit services.
Toward that end, Chime acquired consumer credit startup Pinch late in 2018. Pinch’s offering was a series of tools to help consumers build better credit. Its most popular service, Pinch Rent, allowed users to increase their credit scores over time by reporting on-time rent payments to credit bureaus.
Pinch has since closed the doors on its service, and Chime has not said whether it will resume offering features like the rent reporting tool. What Britt would confirm, however, is that the Pinch team would be critical in Chime’s next phase, building credit and credit management products for their millennial customer base.
“The reality is that typical debit card and checking accounts do nothing to build your credit score,” he noted. “So as we think about the future set of products that we want to roll out, we’re very focused on helping our members with that part of their life.”