How does Chime make Money?

Chime Financial, Inc. Is an American tech company that is a pioneer in providing mobile banking services to its clients.

The company does not charge from its customers and makes money solely through interchange fees, interest earned on cash and ATM fees.

 The customers of Chime who hold a valid account are issued Visa debit or credit cards. They can access the online banking system through Chime's website or application.

Chime does not have any physical branch and operates through its website or app only. Chime also does not charge any fee for transactions or levy any monthly subscription fee.

This article is created to give you deeper insights into the neo banking giant that is gaining fast prominence in the US.

This model of banking without any physical trace is gaining momentum in Europe, is in a growing stage in the US and will soon find its market in Asia and other regions as well.

How Does Chime Make Money?


In February 2020 Chime had 8 million account holders. Chime was started by Chris Britt and Ryan King in 2013 in San Francisco, California.

 Chime was created with a mission to provide banking facilities which are easier and more efficient as compared to the traditional banks. As of 2020, the company was able to secure $1.5 billion in private funding.

Chime acquired Pinch in 2018 which is a start-up targeted to help young millennials build their credit score.

It helps millennials and adults to pay their rent on time and timely loan repayments which increases credit scores considerably. While Chime helped Pinch acquire new candidates, the co-founders of Pinch joined Chime as a part of the acquisition.

Chime's other associations are with the Dallas Mavericks as their jersey sponsor. This was a multi-year deal of Chime with the basketball team giant.

Since the company has no real physical locations, it saves big on zero spending on operation costs. At inception, chime only integrated its app into the user's bank account.

 The company has grown since and offers standalone financial services with zero transaction costs.

 The customers of Chime enjoy ATM withdrawals at no extra cost, unlike other banks which charge a good sum on every transaction. The users get real-time updates about their account, transactions, dues and other utilities related to transactions.


The company has a wide range of financial products to offer to its clients. These services are provided by The Bancorp Bank or Stride Bank.

Since the working is done entirely through online modes, the company is there to assist the consumer at all times, unlike a typical bank which has fixed opening and closing hours.

 Chime assists the consumers in planning their finances, manages their payments and streamlines the transactions. All the financial needs of the customers are met effectively by Chime which takes away the stress of the millennials and young adults.

Consumers can plan their budgets in a proper and synchronised manner.

The Chime account is easy to set up and starts working in minutes. Chime video-verifies the identity which makes it easy for the consumers as they do not have to visit banks and stand in queues for account creation and verification.

Upon successful creation of the account, Chime users get an account number and a debit card for charging which is linked to their Chime bank account.

Some features that Chime offers are as follows:

  • On the app, a dashboard appears that gives all the details of the account's spending and receivables
  • The amount can be deposited in a savings account automatically upon setup
  • Amounts can be set aside for payments so that the payments can be done on time. This is for increasing the credit score of candidates so that they can obtain future loans, property or other valuable with ease
  • Chime does not charge any overdraft fees
  • Also, no fee is deducted on ATM withdrawals. In the US alone, there are 60,000 Chime ATMs from which Chime account holders can withdraw cash from their Chime bank accounts
  • Users can pay other Chime users through their app

These apart from some other features make Chime stand out from other competitors in the market.

The products and services offered by Chime give real value and make financial planning and organising easy and smooth.

A Chime account can be obtained by any US citizen above 18 years of age who holds a valid Social Security Number. They should also have a registered address in the US or Columbia. 

Through Chime, the users can opt for credit accounts, debit accounts or Savings accounts.

The 'Credit Builder' feature of the app is the most in-demand and popular feature of Chime as youngsters are looking forward to demonstrating their responsibility-undertaking ability.

Pinch had been working in this domain early on, and Chime's partnership has been beneficial as Chime also believes in the similar philosophy of empowering the youth and millennials to take control of their finances. 

Chime was able to generate $750 million in July 2021 by projecting a valuation of $25 billion.

There is a possibility that Chime will be a listed company on the IPO to be the next fintech startup to start on the stock market. Other fintech companies listed on the IPO are Robinhood, Wise and Affirm.

 Establishing on the IPO market is a profitable move as seen in the cases of the aforementioned fintech as their value has increased considerably on the public market.


Since Chime does not charge its customers on the transactions they make, nor does it charge through ATM withdrawals, then how does Chime earn?

Interchange Fees

Chime earns through interchange fees as follows:

  • Chime makes money through the interchange fees conducted through the Visa payments platform. This interchange fee is the largest revenue generator model for Chime.
  • This is the fee the partner merchants pay to Chime for processing any transactions that happen under their radar. 
  • When any Chime bank account holder swipes a card for payment, which is a Visa card, the merchant has to pay some amount to Chime as a processing fee. The merchant earned through Chime hence merchants are liable to pay a commission fee to Chime.
  • The merchant will pay 1.5% of the transaction amount to Visa and Chime will earn a percentage of that from Visa
  • This fee obtained from the merchant goes back into Chime as well as it has to recover the account fees, ATM charges, overdraft fees, Account fees, Transfer fees, International fees and non-sufficient fund (NSF) fees, and other expenses that go into running a bank since all these services are not chargeable from the customers.

In this way, Chime earns on any Visa card swipe of its customers. This amount is paid from the merchant side and not deducted from the bank account of the customer. 

This number is quite less as compared to other financial service companies like Amex.

Every user will make about 40 transactions a month and depending on the transaction amount, Chime will earn considerably. 

Chime is still in its initial years of building a consumer base as it is still trying to acquire as many customers as possible by selling this feature of 'fee-free mobile banking'.

Undoubtedly, this feature is liked by consumers as it grew from one million in 2018 to eight million in 2020, in just two years.

As of April 2022, Chime reported 13 million active users all across the US and District of Columbia regions.

The neo banking company is even able to give tough competition to the European contenders Revolut and Monzo. 

Interest on Cash

Since Chime offers a service of a Savings Account as well, the customers can set aside an amount to be saved in their bank accounts that they need not use and deposit for saving purposes.

This amount is saved with the bank for long periods. Chime uses this amount to lend to other financial institutions and charges interest on them. This is another arena for Chime's income.

Chime lends this money to financial institutions, banks and individuals on a short-term basis and obtains interest amount on the principal.

 This interest rate is well above the 0.5% Annual Percentage Yield (APY) that Chime offers to its customers. The difference is the income for Chime.

ATM Fees

Chime has a broad ATM network including VPA and MoneyPass. 

  • If a user is withdrawing cash from Chime enabled and supported ATM then no fee is levied 
  • But if the user uses any other bank outside of this network then the user is subjected to pay $2.50 per ATM withdrawal. 
  • This amount is gained by Chime and the ATM provider can charge another fee additionally as per their discretion and policies. 
  • The income from ATM fees is a source of 20% of the total revenue for Chime.



  • Easy to set up an account
  • Gives a competitive savings APY
  • The automatic Saving feature encourages savings
  • Helps build Credit score which is beneficial in the long run


  • Lack of physical contact and support
  • Technological failures and breakdowns



Revolut is a British fintech company headquartered in London. The company was established in 2015 by Nikolay Storonsky and Vlad Yatsenko.

The company products are issuing current accounts, debit cards, stock trading and insurance. Apart from these, the company also gives services in the currency exchange and peer-to-peer payments domains.

As of 2020, the company's revenue was £222 million. Apart from the UK, the company has expanded its market in Japan. In November 2020, Revolut was at break-even and became the UK's most valuable company. 


N26 is a German company offering financial services to its clients. The areas served by N26 are the European Union, Iceland, Liechtenstein, Switzerland and Norway.

The company was established in 2013 in Munich by N26 GmbH. It offers a basic current account, a debit card and an overdraft facility to its users. It also gives the features of investment options and premium accounts by paying a monthly fee. 


This also comes under the category of neobank of the UK having all operations on the online platform.

The virtual bank was founded in 2015 by Gary Dolman, Jason Bates, Jonas Huckstein, Paul Rippon and Tom Bloomfield.

The company was originally operating through a mobile app and prepaid debit card. By March 2020, Monzo had a total of 4 million customers


It can be concluded that Chime is leading the baton in terms of virtual banking facilities where the millennials want everything on the go.

With the Chime app, the users can manage their finances with ease and have everything in one place. Withdrawing an amount from a Chime bank account is also easy considering the vast expanse of the ATM network of Chime and its assisted partners.

Chime's earnings are also steady as seen in the past years and the future figures look good. The major challenge that Chime has to face is the rising competition from other banking institutions offering services on the same lines. Another challenge which can be turned into an opportunity is to scale and expand Chime to other regions like Europe, Asia and Australia where the market is ripe for online banking facilities.


  1. How does Chime make a profit?
    Chime has three major sources of income, which are the interchange fees, interest on cash and ATM fee. The interchange fee is payable when a user with a Chime account swipes his Visa card. The merchant here is obliged to pay 1.5% to Visa from which Chime gets a share. Interest on cash is another way for Chime to earn profit by encouraging Savings accounts. The ATM fees are applicable while drawing cash from non-Chime ATMs. 
  1. How much does Chime make per customer?
    When a user withdraws an amount from an ATM that is out of the Chime network, an amount of $2.50 is deducted from the user's account per transaction. Apart from this, it loans to other financial institutions on a short-term basis and earns from them in the form of interest.
  1. What fees does Chime charge?
    Chime does not charge any amount on the creation of the account, sending and receiving money and cash withdrawal. It will only charge either the merchant, the financial institution to whom it has loaned or at last from the user and that too when he is obtaining cash from a non-Chime supported ATM.

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