How Does Chime Make Money? Chime Business Model

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How Does Chime Make Money?: If you are very familiar with the fintech sector, you will notice that various fintech banks such as Chime have little or no transaction fees. Others such as Chime don’t charge any fee on transactions and this leaves the populace with questions on how they make their money.

Some have propounded the theory that these digital banks are secretly embezzling their money and would suddenly shut down, hence stealing their users’ hard-earned money. This is far from the truth. 

Chime makes money majorly from charging out-of-network ATM, interchange fees and raising of funds through funding rounds. In this article, I would be enlightening you on how does Chime make money and why you should bank with them.

How Much Do American Households Pay in Bank Fees Per Annum?

When it comes to bank fees, the American populace and others from different countries are being exploited heavily as an American household pays over $330 per annum on bank fees and $577 in hidden charges such as fraud expenses, bank overdrafts, and bad credit.

When you move over to how much these traditional banks are making per annum with these charges, it amounts to a whopping $34 billion per annum which is shocking!!!

When six reputable banks in America were analyzed by various experts in the banking and finance sector, it was discovered that over 50% of their net income came from overdraft fees. These overdraft fees are collected when one goes into overdraft.

Basic Terminologies

  1. Overdraft: It is the process of withdrawing more money from an account than there is credit.
  2. Traditional Banks: These are banks which have physical branches and a domestic banking license. E.g. ING, Bank of America, Banco Santander.
  3. Fintech Banks: These are banks which offer basic financial services to their users but don’t have any physical branches and operate digitally.
  4. Credit: It is an entry which shows the total amount received in a bank account.
  5. ATM: Automated Teller Machine

How Does Chime Make Money?

As I have stated before, Chime is a fintech bank which means they don’t charge fees for any of the financial services they offer to their customers – such fees include:

  1. ATM Maintenance fees;
  2. Foreign transaction fees;
  3. Overdraft fees;
  4. Monthly maintenance fees.
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On a lighter side, this means that Chime is a charity organization because in our present climate it is rare to find fintech banks which open American bank accounts for free without fees. Here are some of the ways by which Chime makes its money:

1. ATM fees:

Various readers will question this point because I stated previously that Chime doesn’t collect fees because they operate fee-free ATMs which in number are over 66,000 scattered around the country. Yet, the company still acquires 21% of its revenue from fees which are charged to its customers who use out-of-network ATMs.

Chime charges its users $2.50 per withdrawal when they use an out-of-network ATM aside from the private fee which is expected to be paid to the owner of the ATM. Here is the official statement which was released by the bank on this issue:

“If you use an ATM not owned by us for any transaction, including a balance inquiry, you may be charged a fee by the ATM operator – even if you don’t complete a withdrawal. This ATM fee is a third-party fee amount assessed by the individual ATM operator only and isn’t assessed by us. This ATM fee amount will be charged to your Chime Spending Account”.

This move to charge users who use out-of-network ATMs isn’t the company’s fault as they have provided users with over 66,000 fee-free ATMs and even though the owner of the ATM charges only 10-30 cents, it is still compulsory to pay the required fee by Chime.

This move by Chime made them over $200 million in revenue as of 2019 and more in 2020 which proves that more Chime users need to use company-approved ATMs.

2. Interchange fees:

Interchange fees when defined by Wikipedia is a term which describes the fee paid between two banks for the acceptance of transactions done with cards.

For example, if you want to purchase a show with your Chime Visa debit card, it is common knowledge that Visa will deduct some percentage ranging from 1.4% to 2.5% from the merchant and pays a portion of that to Chime hence providing an avenue for revenue generation.

Chime presently has over 12 million users and each user based on statistics performs 40+ transactions per month. 

3. Raising of funds through funding rounds:

Chime has conducted over 10 funding rounds and during that period they raised over $1.5 billion. Their funding round started in 2013 where they raised $3.8 million but that’s nothing compared to what they generated in 2019 and 2020 which were $700 million and $533 million respectively.

Out of the 26 investors which Chime has had over the years, the most recent are Batsalel Elfassy and General Atlantic.

How Does Chime Make Money? Chime Business Model
How Does Chime Make Money? Chime Business Model

What is Chime?

Chime is an American digital bank which charges zero charges for transactions and other fees that traditional banks normally remove from their users’ bank accounts.

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Once during a survey on the streets of America, most people thought Chime was a traditional bank as there are users with bank cards and other financial services but that isn’t the truth as Chime is a financial technology company (Fintech).

The bank isn’t alone as they are supported financially by two other banks namely: Bancorp Bank and Stride Bank which work together to ensure that you are provided with the best financial services available.

When asked by a CNBC journalist about the initiative behind the launch of Chime, the CEO, Chris Britt had this to say:

“Nobody wants to go into bank branches, nobody wants to touch cash anymore, and people are increasingly comfortable living their lives through their phones”.

Although rival banks have tagged them as a Fintech company, the company prefers the term “Chime Bank” and it uses that name as its website address. When we look at the company’s net worth, it is aggregated by top sources to be at a whopping $25 billion which is not too shabby as the company just commenced operations 10 years ago.

Pros and Cons of using Chime for Financial Transactions


  1. It doesn’t require you any monthly fees, transaction fees, ATM maintenance fees, Overdraft fees and the likes.
  2. It has one of the best saving options as they provide customers with high interest.
  3. When using the direct deposit feature, one can receive a deposit 2 days earlier.


  1. It is only available to US residents.
  2. When one has a debit card, it can’t be used to top-up or deposit money to the card.
  3. The customer service provided is very poor and usually not helpful in the case of any problems.

Chime Review

  1. The opening of an account and the maintenance fees:

Opening an account on Chime is free for all and as stated before, they don’t charge for any maintenance or minimum fees from you. Chime is a fintech bank which means the whole process of opening an account is done online.

  1. Card fees:

Once ordered, getting a Chime Visa debit card is free and the dispatch rider won’t request any amount from you unless you decide to tip him. They also provide cards to users who either lost or had their card stolen for free which other competitors in the market don’t implement. 

The Chime debit card also allows users to perform international transactions for free although this feature is limited to certain countries.

  1. ATM fees:

Withdrawing money at any of Chime ATMs in America is free to all users but when these transactions are done at any out-of-network ATMs, Chime demands a compulsory fee of $2.50 paid per transaction aside from the additional fee which will be demanded by the out-of-network ATM provider.

It is also important to note that there is a $500 daily withdrawal limit on any Chime ATM withdrawal nationwide.

  1. Transfer fees:

Chime provides its users with free transfers either from their Chime clearing account or your Automated Clearing House (ACH) but this does not apply to foreign transfers as Chime isn’t a bank yet.

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Also, there are limits to the transfer made using your ACH which are

  • $10,000 transfer limit per day;
  • $25,000 transfer limit per month.

Note: There are no limits to how many times you perform transfers using your ACH as long as it doesn’t exceed the transfer limit.

  1. Top-up fees: 

Chime doesn’t charge any fee when you deposit into your Chime account as it is free either through direct deposit, bank transfer or transfer from one Chime account to another.

  1. Chime Currencies:

Presently, the only currency available on Chime either for transfer or saving is the USD (US Dollar) which can’t be sent to any foreign account as Chime doesn’t support wire transfers yet.

7) Chime Partner banks location:

As I stated before, Chime has two partners which are Stride bank and Bancorp bank – both banks are based in Oklahoma, USA and South Dakota respectively.

Important Features of Chime

Chime has some features which you can explore while using the Fintech bank. They are listed below:

  • Sending of money is instant on Chime
  • Chime offers smart savings in which the amount spent by you on your debit card is rounded up to the nearest dollar and the excess is stored in your Chime Savings account.
  • Chime provides a feature for free overdraft
  • It allows one to set up Apple Pay, Google and Samsung Pay.
  • It also provided a Credit builder option which helps to build one’s credit scores.

Missing Features on Chime

Chime is a big and fee-free fintech bank but they are some features not available which we think it’s important. The features are mentioned below:

  • It doesn’t provide a feature for monthly budget or spending goals
  • The feature of sending money requests to friends or splitting bills isn’t available on the app.

Conclusion on: How Does Chime Make Money

With the present trend nowadays in the Fintech sector, companies like Chime can’t be overlooked because of its charitable profile in depositing without charged and no transaction fees. Chime also provides users with a lot of features which in the nearest future would propel them to become one of the top Fintech companies in the US.

Also, I would strongly recommend that the company commences plans to extend their services to other countries as the USA can’t be the only country enjoying these features (Just kidding????). To those seeking my opinion on Chime, I would strongly advise you to sign up on the platform if you are within the company’s territorial jurisdiction.

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