How does Chime make money?

By   |   Verified by Andrew Boyd   |   Updated 22nd June 2021

How Chime makes money
  • Chime is a fintech offering no-fee, online banking services through partner banks.
  • Chime’s mission is to make basic banking services helpful, easy and free.
  • Generates fees from merchant transactions which are used to eliminate overdraft, monthly service, minimum balance, or other consumer fees.

Chime is a fintech company offering several consumer financial products through its mobile application. As a neobanking company, Chime doesn't have any physical locations, operating solely online. Chime works with banking partners to offer no-fee bank accounts with no overdraft, monthly service, minimum balance, or other consumer fees. We review how Chime makes its money and everything else you need to know about the Chime business model.

Chime has more than 12 million account holders, making it bigger than many of the fintechs in the consumer banking space. These 12 million account holders conduct an average of 40 transactions each every day through the mobile app. That level of engagement racks up some serious fees for the fintech.

With no hidden fees, including fee-free overdraft facilities, how does Chime make enough money to operate?

What does Chime do?

Founded in 2013 by Chris Britt (CEO) and Ryan King (CTO), Chime is a fintech company with no physical locations, providing banking services through their partners Bancorp Bank and Stride Bank. As a result of its lack of brick-and-mortar establishments in its model, the company saves a massive amount on operating costs.

At launch, Chime was only an app integrating into the user's bank account, but the company now offers users standalone financial facilities. Customers still get all the benefits of the original Chime offering, including fee-free ATM withdrawals and payments. Users receive real-time updates on account balances and information on spending transactions processed through their accounts.

How does Chime work?

This neobanking app focuses on the millennial market. The company offers consumers a diverse range of financial products and services, and as a digital bank, the consumer communicates entirely through an online portal.

The customer conducts all transactions and communications with Chime through the dedicated app on their smart device. The Chime app offers a range of financial tools for better budget planning and other economic challenges in life.

Accounts are easy to set up in a few minutes and require video authentication for verifying your identity before opening your account. Chime customers receive a dedicated bank account with a linked Visa debit card for charging.

Some of the app features include the following.

  • A detailed dashboard overview of their account balance and spending.
  • Automatic contributions to savings accounts.
  • Direct deposits for early payments.
  • No overdraft fees.
  • No fees on ATM withdrawals, with over 60,000 ATMs across the US.
  • Instant payments to other users in your Chime network.

The company also has other noteworthy products, adding real value to the user's financial planning. Chime gained popularity through its model of offering no fees, with transparent banking processes for consumers.

Chime is available for any US citizen 18 years or older. However, users need to have a valid Social Security Number and a registered address in the United States or the District of Columbia.

Consumers have options for debit accounts, savings, and credit accounts with Chime. The "Credit Builder" facility targets millennials and Gen Zs who want to demonstrate financial responsibility and improve their credit scores. After Chime’s acquisition of the fintech "Pinch" back in 2018, the company started taking an interest in helping younger adults build their credit score.

How Chime makes money

Chime makes money by charging its clients interchange fees on the transactions they make using the Visa payments platform. Chime also earns through ATM fees and interest earned on cash.

Interchange fees

Chimes' biggest earner is its interchange fee model. This stream accounts for the fees its partner merchants pay Chime for processing transactions through its network. Every time a Chime user swipes their Visa card, the merchant is liable for a processing fee to Chime.

Merchants pay a fee of around 1.5% to Visa, and Chime gets a percentage of that, which is well below other processing fees by official credit card companies, like Amex. With millions of users processing around 40 transactions a month, that adds up to significant income for Chime.

Chime uses its merchant fees to benefit consumers by eliminating account fees, ATM charges, and other fees associated with the typical banking model.

Chime started with around 1 million users in 2018. As of 2020, the company passed the eight million user mark and continues to grow rapidly.

Interest on cash

Chime users also have the option of investing in savings accounts and investment products through the app.

The automatic savings feature directs users' money into a high-yield savings account. Chime lends these funds out to other financial institutions and banks on a short-term basis. In return for the loan, Chime receives interest on the cash at an interbank rate which is well above the 0.5% APY on cash balances that users get in their accounts.

ATM fees

The Chime ATM networks include VPA and MoneyPass. If a customer uses the ATMs outside of this network of 38,000 locations, they pay $2.50 per ATM withdrawal.

ATM providers may also charge additional fees as per their discretion. According to reports, ATM revenue accounts for up to 20% of Chimes earnings.

Future growth engine

Chime’s CEO states the company builds its products around four core elements of financial health, including spending habits, saving habits, credit management, and investment strategies. To that end, Chime will continue to develop projects to support users with limited to no credit by providing tools and education so they can better manage their financial future.


As a leading fintech in its market, Chime has plenty of competition from other apps in the same space.

As a digital bank, Dave, Marcus, Ally Bank, and Varo Bank are the company's biggest competitors. Since these banks all have charters, Chime relies on its partner banks, Stride Bank and The Bancorp Bank. Just like their competitors, Chime can offer their customer FDIC-insured deposits on all balances and investments held with the neobank.