FinTech: Challenger Bank Chime’s Latest Raising Stands at $700 Million
Neo, or ‘app-only’ bank Chime is a new breed of ‘zero-fees’ fintechs that are giving traditional banks a run for their money.
Branchless, fintech startup Chime is enjoying startling growth in the number of customer accounts. It’s no surprise that it’s also well-funded. Its latest funding round that commenced in November 2019 has secured $700 million from 25 investors. (CROWDFUND INSIDER)
Growth snowballs at Chime
According to a Bloomberg report, which cited CB Insights, San Francisco-based Chime had about 8 million accounts as of mid-February. That’s a sharp uptick from the figure of 5 million accounts reported last fall according to CROWDFUNDING INSIDER. In 2018, Chime had only 1 million customers, according to Bloomberg.
Chime does not have a banking license but its bouquet of bank-like services is poaching millions of customers away from traditional banks such as Wells Fargo & Co. (NYSE: WFC) and JPMorgan Chase & Co. (NYSE: JPM).
“The majority of our members are coming from the big banks,” said Chief Executive Chris Britt.
Britt attributes the influx to Chime’s zero-fees policy. He cites customers’ disillusionment with traditional banks that “love to sneak charges into their customer accounts every time you look the other way.” The upstart bank claims such clandestine fees could total upwards of $329 annually for an average US household.
“We are now the largest and fastest-growing [challenger bank] in terms of accounts and rate we’re adding them,” said Britt to Forbes in September. “We offer a great alternative to traditional banks.”
A top product at Chime is its direct deposit scheme which pays out salaries two days earlier.
The fintech startup also offers fee-free overdrafts up to $100 through its SpotMe product. Chime claims to have saved customers more than $200 million in overdraft fees.
Last month, it declared a new 1.6% interest rate on savings accounts, which is far superior to most large banks’ rates of well under 1%.
However, Chime provides traditional banking services through a tie-up with Bankcorp Bank and Stride Bank, and credit cards in collaboration with other financial service firms.
Related Story: FinTech: Aussie NeoBank Xinja “Inundated” With Deposits
Latest Alternative Investment News
Alternative Investments/Digital: State Street Digital, A New Division At State Street, To Focus On Crypto
State Street (NYSE: STT), which has $40.3 trillion in assets under custody or administration, said Thursday it is establishing a new digital finance division called State Street Digital. The new…
United Airlines (NASDAQ: UAL) announced its new corporate venture fund, United Airlines Ventures, on Thursday. The fund’s brief is to invest in emerging companies that could reinvent travel and aviation…
The IMF warned Thursday that El Salvador’s move to adopt bitcoin as a legal currency in parallel with the US dollar could have various economic and legal repercussions. El Salvador’s…
Clip, a Mexican digital payments and commerce platform founded in 2012, announced June 10, its raise of $250 million in a round led by the SoftBank Latin America Fund and…