Kevin JohnsonChime Financial, Inc. is an American fintech company based in San Francisco, California. Chris Britt and Ryan King founded the company in 2012 to provide a more flexible alternative to traditional banking.
Chime acquired Pinch in 2018 to help Millennials and young adults build their credit scores. In Jan 2020, Chime signed a multi-year deal with the Dallas Mavericks as their jersey sponsor. The company selected Goldman Sachs Group to spearhead its initial public offering in 2022 but shelved its IPO plan.
In mid-2022, Chime had around 1,300 employees, but the company cut over 160 jobs, or 12% of its workforce, in Nov 2022 amid uncertainties in the financial sector. [1]
Chime harnessed consumer distrust and dissatisfaction with traditional banks to build a fast-growing business. The company provides fee-free mobile banking services, but is not a bank. Account holders use issued Visa debit or credit cards to access an online banking system through Chime’s website or mobile apps.
As of May 2023, Chime ranked #15 on CNBC’s Disruptor 50 List. The company focuses on US customers previously under-served by the standard brick-and-mortar banks. However, Chime faces stiff competition from Ally Bank, Aspiration Financial, Axos Bank, One Capital, and PayPal. [2]
Here is an in-depth analysis of Chime’s top competitors and alternatives:
1. Discover Bank
Year founded: 1985
Headquarter: New Castle, Delaware
Discover Bank is a digital bank owned by Discover Financial Services. Its parent company also operates Discover Card, America’s third-largest credit card brand. In 2022, Discover had 60,000 ATM locations and nearly 50 million cardholders.
Discover offers checking and savings accounts, personal loans, debit and credit cards, home equity loans, and student loans.
Like Chime, Discover doesn’t charge monthly service fees; however, the main competitive advantage of Discover is its cash back rewards on debit cards. Cardholders earn 1% cash back on up to $3,000 monthly purchases. Discover Bank is one of the best alternatives to Chime for low-cost checking accounts. [3]
2. Revolut
Year founded: 2015
Headquarter: London, England
Revolut is a British neobank and fintech company. It provides banking services and money transfers and exchanges. In Jun 2023, Revolut surpassed 30 million retail customers globally. The company has 6,000 employees and processes over 400 million transactions monthly. [4]
Revolut offers P2P payments, Saving Vaults, Over-18 bank accounts, and Stays for holiday booking. In 2021, Revolut became the UK’s most valuable fintech firm at a $33 billion valuation. The company has waited over two years for UK regulators to approve its banking license application and has over 6.8 million UK customers. Revolut is a formidable competitor for Chime. [5]
3. Current
Year founded: 2015
Headquarter: New York City, New York
Current is one of America’s largest neobanks. It offers mobile-only checking accounts, a branded debit card, fast-tracked payment options, and overdraft protection. In 2022, Current had over three million users.
Current and Chime are neobanks with fee-free checking accounts, but Current offers 4% APY on savings versus 0.5% provided by Chime. Like Chime, Current doesn’t hold a banking license.
The company operates its banking service through partnerships with Choice Financial Group and Metropolitan Commercial Bank. Customers can use their debit cards at over 55,000 surcharge-free ATMs on the Allpoint ATM network and earn interest on funds in their Savings Pods. Current is a worthy alternative to Chime. [6]
4. Axos Bank
Year founded: 2000
Headquarter: San Diego, California
Axos Bank is a federally chartered bank and the consumer brand of Axos Financial. It offers banking products for individuals and businesses. In 2022, Axos had around 1,200 employees and an expansive ATM network with 91,000 ATMs.
Axos offers several account types for different target consumers and businesses. Customers can open a no-frills non-interest-bearing account under Essential Checking or Rewards Checking to earn 3.30% APY. Its Golden Checking account caters to individuals 55 and older, while First Checking is designed for kids aged 13-17. Axos Bank is one of the top competitors for Chime. [7]
5. Varo Bank
Year founded: 2015
Headquarter: San Francisco, California
Varo is an FDIC-insured, online-only bank. The company offers services online and through its mobile app. In Feb 2020, Varo became the first neobank in the US to receive a banking license.
The main competitive advantage of Varo is its expansive ATM network, with over 55,000 Allpoint ATMs globally. Customers can request for one advance and continue receiving subsequent advances if they have direct deposits of $1,000 or more to their Varo Bank Account or Varo savings account over the past 31 days.
Like Chime, Varo provides fee-free ATM withdrawals, overdraft protection, and debit cards. Varo is one of the best alternatives to Chime. [8]
6. Ally Bank
Year founded: 2009
Headquarter: Sandy, Utah
Ally Bank is an all-digital financial service owned by Ally Financial. The company offers fee-free checking and savings accounts, credit cards, personal loans, and investments. As of July 2023, Ally’s interest rate for the high-yield savings account was 4.0% APY.
Both Ally Bank and Chime don’t charge checking account holders. In Q1 2023, Ally added the highest number of retail customers in a single quarter. The company makes most of its revenue from auto loans, and this portfolio increased 6.9% year-over-year in Q1 2023. Ally Bank is one of the best alternatives to Chime. [9]
7. Capital One
Year founded: 1994
Headquarter: McLean, Virginia
Capital One is America’s ninth-largest financial institution. It offers credit cards, auto loans, banking, and savings accounts. In 2022, Capital One ranked the best nationwide bank with the best mobile banking app by JD Power. The company has over 50,000 employees.
Capital One and Chime offer digital banking, but Capital Online operates both online and offline. The company has around 300 in-person branches and 54 Capital One cafés across the US.
Consumers can open a Capital One 360 Checking account to access the best neobank features with some benefits of traditional banks. Capital One is one of the top competitors for Chime. [10]
8. Venmo
Year founded: 2009
Headquarter: New York City, New York
Venmo is a peer-to-peer (P2P) payments app owned by PayPal since 2013. In Mar 2021, Chime launched its P2P payments service and competes with Venmo in the P2P sector.
Venmo users can pay merchants, apply for a debit or credit card, and earn cash back rewards. In Jun 2023, the Consumer Financial Protection Bureau warned consumers against storing money on Venmo and other payment apps due to security risks. This recommendation undercuts Venmo’s competitive advantage over Chime. [11]
9. One Finance
Year founded: 2019
Headquarter: Sacramento, California
One Finance is a Sacramento-based startup that operates an online bank. Customers can complete all their banking from a single account and earn high APY with zero monthly fees. In Jan 2022, Walmart acquired One Finance after raising $40 million in Series B funding.
One Finance and Chime leverage technology to improve the banking experience. The main competitive advantage of One Finance is its unified approach that combines savings and checking into a single account.
Each One Finance account comes with Spend for checking, Save, and Auto-Save for high-yield savings. Customers can manage their finances and set savings goals. One Finance is a versatile alternative to Chime. [12]
10. Aspiration Financial
Year founded: 2013
Headquarter: Marina Del Rey, California
Aspiration is a financial services company that offers a cash management account (CMA). It started as an environmentally-conscious firm allowing customers to round up their purchases to nearest dollars for donation to tree-planting organizations.
In Apr 2023, Aspiration laid off 180 employees or more than half of its staff. The company cut about 100 jobs in the first lay-off round in Dec 2022. [13]
Aspiration is a sustainability-as-a-service firm that helps consumers to make ethical financial choices. Like Chime, Aspiration is not a bank but an online-only financial firm. Customers can use Aspiration’s Spend & Save CMA for their financial needs and transactions. Aspiration is one of the best alternatives to Chime. [14]
11. Dave
Year founded: 2016
Headquarter: Los Angeles, California
Dave is a pioneer in financial services and one of the leading US neobanks. The company uses disruptive technology to provide affordable banking services. In Q1 2023, Dave added 587,000 new members and now serves over 12 million users. [15]
The main competitive advantage of Dave is its ExtraCash Account, which offers up to $500 of interest-free overdraft advances. In Q1 2023, ExtraCash originations increased by 46% to $798 million. The company also provides Dave Debit Card to registered members. Dave is one of the best alternatives to Chime for overdraft advances.
12. Cash App
Year founded: 2013
Headquarter: San Francisco, California
Cash App is a peer-to-peer (P2P) payment service owned by Block, Inc. It allows US and UK users to transfer money to each other via a mobile phone app. In 2022, Cash App had around 48 million active users and 13 million debit card holders.
Cash App and Chime enable online transactions, but Cash App specializes in P2P payments. Shoppers can use Cash Card to pay for purchases from their Cash App balance.
In Jun 2023, a technical glitch double-charged some customers for transactions using Cash Card. The company fixed the issue and refunded affected Cash Card users. Cash App is one of the best alternatives to Chime for cashless transactions. [16]
13. MoneyLion
Year founded: 2013
Headquarter: New York City, New York
MoneyLion is a fintech company that provides personalized financial products and content. The firm operates a consumer finance mobile app and an embedded finance platform. As of Apr 2023, MoneyLion’s partner network had over 1,000 enterprise businesses.
Both MoneyLion and Chime operate in the fintech sector, but MoneyLion offers enterprise technology with a robust search engine and marketplace for financial products.
Companies can add embedded finance solutions to their business and leverage advanced AI-backed data and tools via MoneyLion’s platform and API. Its consumer mobile app provides curated content and a full-fledged suite of features to help users save and invest. MoneyLion is an innovative alternative to Chime. [17]
14. Robinhood Markets, Inc.
Year founded: 2013
Headquarter: Menlo Park, California
Robinhood is an American financial services company. Its mobile app supports commission-free trades of stocks, exchange-traded funds, cryptocurrencies, and individual retirement accounts. In Dec 2022, Robinhood had around 2,300 employees.
Robinhood is best known for its app that enables users to invest in crypto and stocks, but it also offers banking features, including a branded debit card and automated savings. Like Chime, Robinhood provides cashback rewards and fee-free transactions.
In 2023, more customers switched to Robinhood’s high-yield deposits and Roth Individual Retirement Accounts (IRAs). Robinhood is a worthy alternative to Chime. [18]
15. Quontic
Year founded: 2009
Headquarter: Astoria, New York
Quontic is an FDIC-insured digital bank that started as a community bank. It offers checking accounts, savings accounts, and mortgage products via online and mobile banking platforms. In 2023, Quontic had 90,000 ATMs in its fee-free ATM network. [19]
Quontic is an insured bank, while Chime is not a bank but operates in the neobank sector. Quontic offers fee-free checking and banking. However, customers incur fees for a dormant account, stop payments, and early withdrawals. Quontic is a worthy alternative to Chime.
References & more information
- RBI Staff (2022, Nov 3). Digital bank Chime plans to shed 12% of staff to slash cost Retail Banker International
- com Staff (2023, May 9). Disruptor 50: Chime. CNBC
- Tarpley, L. (2023, Jun 22). Discover Bank Review 2023. Business Insider
- Corporate Editor (2023, Jun 1). Revolut surpasses 30 million retail customers worldwide. Revolut.com
- Makortoff, K. (2023, May 19). UK ministers ask to meet Revolut amid reports it may be refused license. The Guardian
- Payne, K. (2023, Feb 6). Current Review: Mobile Banking 2023. Forbes
- Payne, K. (2023, Apr 13). Axos Bank Review 2023. Forbes
- Pino, B. (2023, Jun 8). Varo Bank Review 2023. Fortune
- Patel, N. (2023, Apr 21). Is Ally Financial Stock a Buy? The Motley Fool
- Van Someren, L. (2023, Jun 16). Capital One 360 Review 2023: Everything You Want in an Online Bank. Finance Buzz
- Mark, J. (2023, Jun 1). Don’t store money in Venmo, Cash App, or PayPal, the regulator says. The Washington Post
- Payne, K. (2023, May 31). One Finance Review: A Combined High-Yield Bank Account with Checking and Savings Features. The Motley Fool
- Mason, E. (2023, Apr 5). Fintech Startup Aspiration plans to lay off more than half of its staff. Forbes
- Birken, E. (2023, Mar 10). Aspiration Review: Non-bank financial disruptor with a social conscience. Investopedia
- Dave Operating LLC (2023, May 9). Dave Announces First Quarter 2023 Results. Globe Newswire
- Rendall, J. (2023, Jun 27). Cash App Issuing Refunds to Customers Double-Charged Due to Glitch. CNET
- MoneyLion Inc. (2023, Apr 19). MoneyLion Announces First Quarter 2023 Financial Results. Business Wire
- PYMNTS (2023, Jun 4). Robinhood Customers Shift to High-Yield Deposits Amid Banking Turmoil. PYMNTS
- Pino, I. (2023, Jan 12). Quontic Bank Review 2023: A digital bank that keeps fees low and APYs high. Yahoo Finance
- Featured Image by Rodion Kutsaiev
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