A new breed of banks has sprung up recently to serve customers who want to handle all of their banking online. We live our lives online, rarely exchange cash, and are sick of the fees that traditional banks charge us when the whim strikes. Neobanks, specifically Chime Bank, are online-only financial institutions similar to banks with more limited options, fewer fees, and higher average interest rates. Sometimes all we need is a checking and a savings account.
By losing the physical branches and concentrating on developing and improving their technology, online banks can focus on what matters most, their customers. They provide streamlined services that function best on mobile apps. They typically don’t offer credit, but partner with traditional banks to keep their customer accounts federally insured. Neobanks don’t replace conventional banks for all customers.
Their offerings are similar to traditional banks but are limited to keep accounts fee-free. They generally include a bank’s most popular features like checking and savings accounts, bill pay and money transfer services, and popular financial resources that assist with budgeting and building savings.
It’s a significant undertaking for a financial institution to become a chartered bank, so many neobanks form alliances with existing banks, allowing them to offer FDIC insurance on the money you deposit. Chime, for example, partners with The Bancorp Bank and Stride Bank to ensure customer deposits.
Let’s recap the benefits of choosing a neobank like Chime to help you manage your money while maximizing your savings:
- Lower costs: Fewer regulations and the absence of credit risk allows neobanks to keep their costs low without monthly minimums and maintenance fees.
- Convenience: If you prefer handling your banking through a smartphone app, this is a dream come true. In addition to primary credit and debit tasks, you can manage your finances and avoid common problems.
- Quicker processing time: Customers can quickly set up accounts and begin processing transactions in less than five minutes. Neobanks that offer loans can simplify loan application processes by using innovative strategies for rapidly evaluating your creditworthiness.
Chime Bank will continue to focus on delivering simple, low-cost banking while teaching its customers how to achieve true financial wellness. With its recently upgraded valuation and funding, acquisitions and talent are top of mind for Chime in 2020 and beyond. As an industry leader, Chime Bank will continue to lead the way with game-changing products that cater to multiple customer segments at different stages of their financial lives.
Who is Chime Bank?
Chime Bank is an online digital bank or neobank based in San Francisco. Chime’s mobile app provides banking services anywhere you are, without overdraft charges or monthly maintenance fees. Valued at more than $14.5 billion, Chime’s emergence as the premier fintech unicorn has shaken up the suits in the financial services industry.
Digital banks seek to smooth out the sharp corners and rigid structure of traditional banking and quickly chip away at their market share. Chime was founded on the premise that basic banking services should be customer-oriented, easy, and free. They want to profit with their members and not shake them down with an outdated business model that relies on overdraft, monthly service, minimum balance, and other excessive fees.
Chime partners with regional banks to design member-first financial products that offer better, lower-cost options for everyday customers who feel exploited by traditional banks. By driving innovation, inclusion, and better access, Chime has become the undisputed leader of the neobank industry.
What Customers Love the Most About Chime Bank
- No hidden fees, no monthly fees, no overdraft fees, no foreign transaction fees, and no minimum balance requirements.
- Growing their savings automatically with a Savings Account
- Managing all their transactions on a smartphone
- Sending money with “Pay Friends” to other Chime members
- Getting real-time push notifications after every purchase and daily balance alerts every morning
- Having the added security of being able to turn your card on/off instantly in the app
- Being able to move money between your other bank accounts
- Access to over 38,000 fee-free ATMs with Moneypass® and Visa® Plus Alliance
- Having Apple Pay™ and Google Pay™ when you forget your wallet
- Treating information security as a top priority
- Offering EMV chip card security
- Providing friendly and responsive customer support
How Does Chime Bank Make Their Money?
Traditional financial institutions earn their revenue in three ways: by charging bank fees, paying retail customers a smaller share of the interest savings that they earn as an institution, and loan interest income (from personal, auto, residential, and commercial loans).
Chime doesn’t charge any overdraft or maintenance fees or require account minimums, so how do they make money? Whenever customers use their Chime debit cards to make a purchase in-person or online, there are merchant processing transaction fees that deduct from the total of the final authorized purchase. The cardholder isn’t paying anything extra, but the merchant who provided the goods or service is paying a percentage of the sale to the issuing bank, which is Chime.
Depending on the purchase category, interchange rates can pay 0.5% – 2% per transaction. If each cardholder paid a modest $600 monthly, issuing banks with 500K clients could generate over $1.5MM monthly. In 2020 Chime Bank already had well over 8MM customers.
Is Chime Bank a Good Fit for My Business?
There’s a reason that Chime Bank is considered the best-performing bank of its kind. Small business owners love simple, hassle-free, fee-free banking.
- Fee-free banking: Banks of all sizes offer free accounts from time to time as a temporary promotion to attract new customers. These free perks usually disappear within a year, leaving you with high overdraft fees and fees for not maintaining a minimum balance. Banks make billions of dollars a year from fees alone. Some credit unions also offer members free checking but lack the mobile access and services that Chime customers love. As a business owner, you don’t have time to constantly monitor all the fine print from traditional banks. Chime eliminates all that red tape.
- Best-in-class offerings: Small business owners understand that every penny counts. Chime Bank offers the industry’s best checking account services that help customers protect their assets while providing the tools they need to build a solid financial reputation. Small business owners can benefit from easy-to-access financial guidance, stellar customer service, and a fee-free banking experience.
- Easy user onboarding: The first experience a prospective client has with Chime Bank is its customer onboarding journey. Chime thrives by helping customers join and open an account in minutes without talking to a salesperson. With Chime, your new account is active in minutes. Instant access helps build instant trust. With some bank branches, an onboarding process can take several days.
Let’s Talk About the Chime App
Chime offers an award-winning mobile app that allows you to manage your money on the go! Fiscal fitness is our thing, so we provide the extra support that customers need to take control of their finances. With the right tools and support, we give our customers what they need to spend and save wisely.
With over 135,000 five-star reviews in app stores, Chime makes mobile banking easy with a modern and intuitive banking app that handles everything from tracking your spending and savings to paying friends. It works on all smartphone mobile devices, whether you’re on an iPhone® or an Android™ device. Transfer money, send and deposit checks, pay bills and even grow your savings automatically without ever worrying about hidden banking fees again.
If your card is ever lost or stolen, you can use the app to block all transactions immediately.
Sign up in Two Minutes
Applying for an account is free, takes less than 2 minutes, and won’t affect your credit score. When you sign up for a Chime account, you’ll receive:
- A Chime Visa® debit card
- A Spending Account
- A free multipurpose Chime banking app
- Your paychecks up to two days early
- Fee Free over-drafts for up to $200 for eligible members
- No hidden fees, none
- Access to 38K fee-free in-network ATMs
- A high-yield 0.50% APY (Average Percentage Yield) savings account
- 300K 5-star app reviews
To open a bank account online, there are a few basic requirements. Here are three things you’ll need to start opening your account:
- Social Security number
- Valid home address
- 18+ U.S. Citizen or resident of the United States
Payline + Chime
When operating a small business, you know what’s hidden in the fine print can slowly chip away at profits. Chime can save you money with no minimum balance requirements, no monthly service, overdraft, transfer, or foreign transaction fees.
At Payline, we offer a full range of payment processing services that maximize your profits while protecting your online transactions. With Payline, you won’t find any hidden fees in our transparent interchange-plus pricing model. We don’t charge extra for PCI compliance, enhanced fraud security, or easy plugins that connect to POS systems, shopping carts, Quickbooks, and the card reader of your choice.
Check our online calculator to determine your savings for switching to Payline. Your first month with Payline is FREE, with no risk, no long-term commitments. Or cancelation fees.