SAN FRANCISCO–The fintech Chime is reporting it has identified what it believes will be a substantial revenue opportunity within digital banking by targeting individuals earning up to $100,000, potentially growing to $426 billion by including those earning up to $200,000.
According to PYMNTS Intelligence, the company’s business model is primarily driven by interchange-based fees generated from debit and credit card transactions.
As of 2024, the company had approximately 8.6 million active members, indicating 23% growth, with 67% of these members using Chime as their primary financial provider,
PYMNTS Intelligence reported that in 2022, as the pandemic waned, it found that only about 9% of consumers used digital banks for their primary financial relationships and accounts.
Less Wave, More Tsunami
“Since then, however, the push toward using apps and mobile devices for everyday financial needs has been less wave than tsunami, and for platforms linking with banks to deliver a range of cards, lending and account offerings, the forging of those primary relationships is gathering momentum,” the company said.
The company partners with The Bancorp Bank and Stride Bank, Federal Deposit Insurance Corp.-insured community banks, to provide banking services.
In an S-1 filing, Chime estimated that its serviceable addressable market offers up to an $86 billion annual revenue opportunity, calculated by multiplying the average revenues derived from “highly engaged” members of $442 by 196 million individuals earning up to $100,000 annually, according to PYMNTS Intelligence.
That revenue opportunity can grow to an annualized pace of $426 billion by targeting consumers who earn up to $200,000 yearly, the filing said, the report added.
The Average Customer
Customers used Chime for 54 transactions per month, on average, per the filing, “of which 75% were purchase transactions using Chime-branded debit and credit cards.” As for the spending on those cards, 70% of purchases are for non-discretionary expenses such as groceries and utilities, PYMNTS Intelligence said.
