The pandemic has crushed the businesses of most of the traditional banks. However, the mobile banking startup, Chime is witnessing a boom and has been continuously favored among the top competitors.
How Chime is Taking Over the Traditional Banking Services
Chime provides banking solutions through a mobile app. All the services that Chime offers including Savings Account, Spending Accounts, a debit card are tied to its mobile app. The mobile banking company has more than tripled its transaction volume and revenue in 2020.
According to the company, hundreds of thousands of new users are joining the platform each month. Many of these users are abandoning big banks to find a resort in the app.
When big banks such as Wells Fargo and Bank of America are losing billions of dollars in market value due to the pandemic, Chime is recording a remarkable price tag.
Chime has now become the most valuable publicly-traded company, Due to the recent market value spike by 1015% to $14.5 billion as per Pitchbook Stats, companies including United Airlines, Tiffany, or Whirlpool.
So what makes Chime such a valuable company, especially in unprecedented times like these?
Firstly, Chime has renowned itself for giving its users early access to their paychecks through a feature called Get Paid Early when they sign up for a payroll direct deposit through their Chime account.
Compared to traditional banks, Chime offers simple advantages. Essentially, it is a consumer fintech company, however, its business model differs from that of the lenders.
Chime does not levy any sort of hidden fees from its customers. Chime makes money by leaving small fees from visa. Its earning model depends on small fees from Visa when users swipe their cards.
Chime also allows its users to take their account to negatives without incurring a fee through its SpotMe app. Moreover, since Chime does not have a lending business, unlike its traditional competitors, it is not affected by rising bankruptcies or low-interest rates.
Chime does not levy any hidden fees from their customers, making it one of the preferred online banking services. When you open a bank account, you are unknowingly signing up for a lot of hidden fees and charges that will be deducted directly from your savings account. With Chime, however, you are safe from all such charges and are liable to pay only for the services that you use.
Early access to stimulus checks
Earlier, Chime was in the spotlight for allowing users access to its $1200 stimulus checks five days early. The company gave its users early access to $1.5 billion in government stimulus payments.
Chime, with the help of its supportive banks, is able to deliver early salary to its users who have had fixed deposits as their way of payment from their employer. As soon as you establish a direct deposit in your Spending account, you can choose to receive your payment up to two days early.
Chime also has a feature called Save When You Spend, which rounds up your transaction up to the nearest dollar every time you use a Chime debit card to make a purchase and transfer the difference to your savings account.
If you are looking to strengthen your credit score through Chime, you can do so by adding money from your Chime Spending limits account to your Credit Builder account and spend it through your Chime Visa card.
Moreover, you can also make an instant money transfer to friends and family using Chime’s Pay Friends P2P app.
Conclusion | How Chime is Taking Over the Traditional Banking Services
Besides offering banking features with no hidden fees, Chime also offers a simple lineup of accounts, competitive savings APY, automated savings tools, and early receipt of direct deposit payments.