Advancements in technology have resulted in some changes regarding how we go about doing several things business-wise, regardless of the industry in question. One sector that’s been shaken up by these advancements in technology is the banking industry or sector. The way we bank over the years has drastically changed due to these developments. If you had any doubts about this what’s so ever, look at an app like Chime.
With Chime, users can enjoy all the services a bank offers without necessarily going through the hassles involved in having an account with a physical bank. The ease with which Chime has made banking has resulted in it receiving lots of users who have not surprisingly have lots of questions about it. That said, this post will get to look at all there is to know about Chime, including how Chime makes money.
Chime is a mobile app that makes it possible to open fee-free checking and savings accounts. It is a “Challenger Bank” per se that offers its users no-fees consumer banking services in simpler terms.
What Is Chime?
Chime is an online-only bank application that allows individuals to open or create a fee-free checking and savings account. It also offers its users debit cards in partnership with Visa. Simply put, Chime provides banking solutions for individuals who want to manage their money on the go.
Worth noting about Chime when looking at what it is all about are the two banks behind it. For Chime to offer its branch-less mobile banking services to the masses, they’ve partnered with two small banks in the U.S., and they are The Bancorp Bank and Stride Bank. This fact has enabled Chime to be FDIC insured, meaning your money is safe with them.
Those who’ve opened an account with Chime get to avoid paying several fees that they usually would with a regular bank. For instance, with Chime, account holders don’t have to pay monthly fees, foreign transaction fees, or even overdraft fees, and many more.
- Download Chime for Android
- Download Chime for iOS
- Website: Chime
- Founders: Chris Britt, Ryan King
- Headquarters: San Francisco, California
How Does Chime Work?
Understanding how Chime works help in knowing how Chime makes money. Understanding how Chime work is straightforward. It comes down to answering the following questions;
- How Do I Open An Account With Chime?
- How Do I Add Money To My Chime Account?
- How Do I Withdraw Money From My Chime Account?
- How Does Chime Early Direct Deposit Feature Work?
- How Do Chime’s Fee-Free Overdrafts Work?
How Do I Open An Account With Chime?
One of the many benefits of banking with Chime is the ease at which you can open an account with them. There are two types of Chime accounts you can unlock once you decide on opening a Chime account. These two are a Chime’s Spending account or a Chime’s Savings account. Regardless of the account, you settle on opening with Chime. You’ll be required to have the following details;
- Your full names
- Email address
- Home address
- Social Security Number (SSN)
- Phone number
- Your date of birth
How Do I Add Money To My Chime Account?
You can go about adding money to your Chime account in many ways. You can choose to add money to your account by way of cashing in a deposit, direct payroll from your employer, through Greendot stations at more than 90,000 retail locations countrywide, through a mobile deposit of a paper check, as well as money transfers from an external bank account linked to your Chime account.
Worth noting with Chime when it comes to adding money to your account is that you might be charged a small fee for every deposit made to your account. These fees tend to vary depending on the third party that you’ve used to top up your Chime account.
How Do I Withdraw Money From My Chime Account?
Taking note that they are an online-only banking application designed for those who want banking on the go, Chime has made it extremely easy for Chime account holders to access their money. With Chime, users can withdraw their money from more than 38,000 ATMs countrywide.
These include ATMs located at CVS Pharmacy, 7-Eleven, Target as well as Walgreens. However, do not that Chime does charge a small fee of $2.50 every time you withdraw money from your Chime account at an ATM that’s considered foreign by Chime.
How Does Chime Early Direct Deposit Feature Work?
If you are employed, Chime makes it possible for you to receive an early paycheck (up-to two days) thanks to their Early Deposit feature. It is straightforward to activate. Ask Chime to send you a pre-filled direct deposit form that you’ll need to hand over to your employer.
How Do Chime’s Fee-Free Overdrafts Work?
Another feature about Chime worth noting when highlighting how it works is its fee-free overdraft feature that totals up to $100 on purchases made by a debit card. As a Chime account holder, you can apply for a future deposit against your negative balance with no fee, thanks to Chime’s proprietary feature SpotMe.
You will, however, need to have monthly total deposits that add up to $500 for you to enjoy the benefits that come with Chime’s SpotMe.
How Does Chime Make Money?
Now that we’ve seen how Chime works, we can now focus on how Chime makes money. From what we’ve learned so far about Chime, we can conclude that the only time Chime gets to make money from their platform is when a Chime account holder withdraws money from their Chime account at an ATM that Chime deems foreign. In such scenarios, Chime usually charges a small fee per withdrawal. But is this all? Does Chime only make money through this source of revenue? Well, no. There is another way Chime makes money.
Chime also gets to make money every time a Chime account holder uses their debit cards to make purchases to merchants or stores countrywide. Chime usually takes a small portion of the transaction fee that Visa charges merchants or stores when someone makes a payment using their card.
Conclusion for “How Does Chime Make Money’
There’s no denying that Chime is a big plus for anyone looking at experiencing a different type of banking. This is more so the case with those keen on enjoying or experiencing banking on the go. So if this is something you’ve given some thought to, you should try them out. Plus, there is nothing to lose Chime is entirely free.
This, however, doesn’t mean that they don’t make money. Chime, despite offering most of its services free of charge to its users does still makes money. This is due to them taking a small portion of the fee merchants are charged by Visa when someone makes a payment using a debit card by Chime.
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