Chime Business Model- How Chime makes money

Digital payments revolutionalized the spending habits of consumers. The instant payment and real-time payment scenario have made the transactional process easy. Chime is one such firm transcending the digital payments industry. In this article, let us understand how Chime makes money.

Until two decades back, daily transactions beyond traditional methods like cheques or cash was never an option. With technological advancements, banking evolved. Subsequently, financial management, personal finance, and payments gateway channels adapted to the developments. The digital transformation in the banking space and consumer spending behavior led to a shift in the payment ecosystem.

What is Chime

In the times when payments were transforming to digitalization, the advent of Neo banks scaled the process to easier terms. Neo banks are online-only banks that facilitate every banking process online. They offer innovative solutions for expense management, personal finance, investments, etc.

 According to a report published by PwC, the neo-bank market can grow at a compounded annual growth rate of around 46.5% between 2019 and 2026, generating $394.6 billion by 2026.

Unlike traditional banks, Chime runs entirely online. For Neo banks, there are no physical branches- it is completely a digitally-run bank. Instead of performing the operations in physical branches, they use a mobile application.

Founded in 2013, Chime is a Neo bank that offers checking and savings accounts to users. They also offer a physical debit card in partnership with Visa. Unlike other banks, Chime doesn’t charge account fees.

Instead, they charge transaction fees whenever customers use their Visa debit cards. Neo banks like Chime are actively in competition with regular banks in digital payments and consumer banking space.

Chime is not technically a registered or regulated bank but offers banking services with minimum or no customer fees. Initially, Chime worked as a service provider for customers using some other bank account. They used to offer free-of-charge debit cards and real-time updates about spendings and account balance.

Although they do not offer business accounts, they’ve made a successful start in expanding consumer products. From offering personal banking services to acquiring new users, Chime has been growing its user base rapidly.

How does Chime make money

Chime makes money by charging a nominal fee per transaction. Their growth is driven by their low-cost or no transactional fees charged for banking services. Apart from this, Chime also gives a detailed overview of an individual’s spending history. Through the Chime app, one can automatically set money into a savings account hassle-free.

Transaction fees

Chime makes money majorly through charging transaction fees i.e., interchange fees. The interchange fee is the nominal amount merchants pay to the banks or financial institutions while using a debit card. Right from ATM charges to non-sufficient fund charges, traditional banks charge a nominal amount for almost every transaction. Being a Neo bank, Chime doesn’t charge any additional fee apart from interchange fees.

Savings account

Chime offers free savings account with no hidden charges. In case customers want to save their money, they can open a savings account with an automatic savings feature. The funds are invested in the profitable assets and share a part of profits with Chime customers. They offer a 1 percent Annual Percentage Yield based on the savings of customers.


Although Neo banks are budding fin-tech spaces, there are many start-ups making their mark. The prime competitors of Chime offer services like peer-to-peer payments, budgeting tools, and expense management. While the rivals focus on monetizing through subscriptions, Chime picked the route of transactional fees.


Monzo caters to the needs of banking solutions like savings and borrowing options and purchasing energy plants. They make money via premium subscriptions and multiple income streams. Read how Monzo makes money


N26 is a premium Fin-tech offering advanced banking tools to both customers and businesses alike. They offer premium monthly packages with advanced features.


Revolut is an advanced Fin-tech catering solutions like digital peer-to-peer payments, trading options, monthly subscription plans, and budgeting tools. It has a presence in over 30 countries, making it the largest player in the Neobanking space.

Starling Bank

Starling is a budding Neo bank offering current and business banking accounts to consumers. Just like a traditional one can apply for loans, carry national and international transactions.


Chime is just like a traditional bank with better and advanced features.

Their success can be attributed to their low-cost or no transaction charges, customized solutions, personal money management, and fully-digital access. All the transactions are facilitated with their partnered Visa cards. For budget-conscious customers, they offer a savings account that gives returns.

As opposed to the other major Fin-techs, Chime makes money only through the transactional fee. So whenever a transaction takes place, the seller of the product will be charged but not the customer. This strategy helped Chime grow rapidly. Also, all the deposits are FDIC insured.

Neo banks like Chime offers solutions that traditional banks lack. As per Crunch base data, Chime raised over $800 million in funding and is expected to grow more in the coming years. 

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