SAN FRANCISCO–Consumers earning at least $75,000 a year are Chime’s fastest-growing group of new customers, helping the financial technology company attract more direct deposits and expand installment lending.
The higher earners are more likely to deposit their paychecks with Chime, increasing its opportunity to become their primary account provider and making more customers eligible for loans through its Prime membership program, according to PYMNTS.
“These folks are signing up for direct deposit at a faster clip, and a greater percentage of them are doing $3,000 or more of deposit in order to qualify for Chime Prime,” CEO Chris Britt said during the company’s Nov. 4 earnings call, PYMNTS reported.
$381 Million in Originations
Chime originated $381 million in Instant Loans in the third quarter, an increase of about 30% from the previous quarter. President and interim Chief Financial Officer Mark Troughton attributed much of that growth to Prime members, according to PYMNTS.
First-time borrowing by Prime members helped push the loan loss rate to 6.3%, Troughton said. He expects another small increase in the fourth quarter. Annualized loss rates for repeat borrowers were as much as 50% lower than those for first-time borrowers, PYMNTS reported.
Recurring direct deposits give Chime insight into customers’ cash flow when setting loan amounts and improve its ability to collect repayments, management said. Troughton said higher earners want larger borrowing limits and that Chime could selectively increase them.
500,000 ‘Members’ Added
Chime added about 500,000 net active members during the quarter, bringing its total to 10.9 million, up 20% from a year earlier. Growth in customers using direct deposit accelerated for a third consecutive quarter, according to PYMNTS.
Troughton said customer acquisition costs declined from the second quarter as Chime improved its allocation of marketing spending. Bundling products through Plus and Prime memberships also encouraged new customers to begin using savings and borrowing products sooner, he said.
Revenue rose 32% from a year earlier to $718 million, accelerating from 27% growth in the second quarter. MyPay and Instant Loans helped drive a 52% increase in platform revenue, PYMNTS reported.
Investor materials showed revenue per active member increased the longer customers remained with Chime. Prime members generate more than twice the revenue of the average active member, according to PYMNTS.
Advance Amount is Doubled
Chime doubled the maximum MyPay advance to $1,000, with the largest limits going overwhelmingly to Prime members. MyPay helps cover expenses between paydays, while Instant Loans carry terms of three to 12 months and generally cover larger expenses, Troughton said.
Chime also expanded its Workday partnership and plans to introduce a pay card as it seeks more customers through employers. Troughton said the employer business already attracts members and should make a meaningful contribution in 2027, PYMNTS reported.
The company is testing an unsecured line of credit with Prime members and expects to introduce an unsecured credit card next year. Its artificial intelligence initiatives include Jade, a personal finance assistant, and tools allowing members to control outside AI agents’ access to their accounts, according to PYMNTS.
Chime raised its fourth-quarter revenue forecast to between $757 million and $767 million, representing growth of 27% to 29% from a year earlier. Shares rose 6% in after-hours trading Nov. 4, PYMNTS reported.
