How Does Chime Make Their Money? A Breakdown of Revenue Streams

Chime has gained popularity as a fee-free banking alternative, but many users wonder how the company generates revenue without charging traditional banking fees. Unlike conventional banks that rely on overdraft charges and monthly maintenance fees, Chime takes a different approach.

Rather than profiting directly from customers, Chime earns revenue through indirect sources tied to transactions, partnerships, and financial services.

Interchange Fees from Card Transactions

Every time a Chime customer makes a purchase with their debit card, Chime earns a portion of the interchange fee. This fee, paid by the merchant’s bank to the card-issuing bank, is built into the cost of accepting card payments. While customers don’t see this charge, it helps fund Chime’s operations.

Interchange fees vary based on transaction type, card network, and merchant category. For a standard Visa debit card transaction, the fee typically ranges from 0.8% to 1.5% of the purchase amount, plus a small fixed charge. Since Chime issues Visa debit cards, it collects a share of these fees whenever users make purchases.

To encourage spending, Chime promotes features like direct deposit and early paycheck access, which increase transaction volume. The more customers use their Chime cards, the more revenue the company generates.

Paid ATM Functions

Chime offers fee-free ATM access through networks like MoneyPass and Allpoint, covering over 60,000 locations. However, customers using out-of-network ATMs may face surcharges ranging from $2.50 to $3.50 per withdrawal. While these fees are collected by ATM operators, Chime may receive a portion under network agreements.

To reduce cash withdrawals, Chime emphasizes digital payment options like mobile transactions and peer-to-peer transfers. Still, when customers use out-of-network ATMs, Chime benefits financially.

Optional Service Fees

Although Chime markets itself as fee-free, certain optional services come with costs. One such service is Express ACH transfers, which allow users to move money instantly between external bank accounts for a fee of about 1.5%, capped at a set dollar amount. Standard ACH transfers remain free but take several business days.

Expedited check deposit is another revenue source. Customers with direct deposit can deposit checks for free, but those without it may face a waiting period. To access funds immediately, they can opt for an instant check deposit service, which carries a fee based on a percentage of the check amount.

Revenue from Partnerships

Chime collaborates with financial service providers to expand its offerings while generating revenue. One example is the Chime Credit Builder Visa® Card, a secured credit card designed to help users build credit. While Chime does not charge interest or annual fees for this product, it benefits from increased user engagement and revenue-sharing agreements with card issuers and network providers.

Chime also earns money through referral agreements with fintech companies offering services like personal loans, insurance, or investments. When users sign up for these services through Chime, the company receives a commission or a percentage of the revenue. This allows Chime to provide additional financial tools without managing underwriting risks or regulatory compliance.

Interest Income on Deposits

Chime is not a bank, but it partners with FDIC-insured institutions that hold customer deposits. These banks invest a portion of deposits in low-risk financial instruments like U.S. Treasury securities, generating returns. Chime earns a share of this income.

While most Chime accounts do not pay interest, its high-yield savings account offers a competitive rate. However, the rate paid to customers is lower than what Chime’s partner banks earn from investing the funds, allowing Chime to profit from the difference. This model provides a steady revenue stream without engaging in lending activities.