Meet the start-up bank with millions of customers trying to disrupt the 'adversarial' American banking system

  • Chime, founded in 2013, already has 2.3 million customers and aims to disrupt banking in the US.
  • The challenger bank offers a fee-less checking account offered through an app. No credit, no lending.
  • "The big banks are easily the least loved brands in the US, and our investors are excited to disrupt a huge market," said co-founder Chris Britt in an interview.
  • Chime has attracted funding from major VCs including Menlo Ventures and Cathay Innovation.

Challenger banks have been gaining prominence across the US as savvy operators take on traditional lenders with disruptive product offerings.

US challenger Chime is no different. It has made waves by offering its customers a fee-less checking account, a rarity in the traditional US banking market. The biggest US banks each make around $1 billion a year in fee-related revenues something that Chime is seeking to change.

"The current banking system is adversarial and out to punish you with a variety of fees," said Chris Britt, Chime's co-founder in an interview. "What our customers value is a mobile app that works, transparent pricing for our products and they don't need to come and visit us in a branch — we have to be an authentic brand."

US banks charged around $34 billion in fees in 2017.

Customers and investors have so far been impressed with the company's offering. Hailing from the world's tech mecca, San Francisco, Chime has more than 2 million customers and has attracted funding from major VCs including Menlo Ventures and Cathay Innovation.

Chime is also close to raising $300 million at a $1.5 billion valuation, according to Bloomberg.

"The big banks are easily the least loved brands in the US and our investors are excited to disrupt a huge market," Britt said. We've had tremendous interest from other investors about future funding as well."

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Alongside the fee-less checking account Chime also operates a peer-to-peer (P2P) lending system without fees which the company claim has been popular to date.

In Europe, where cross-border travel is more common, challenger banks have focused on reducing currency exchange costs, while also seeking to reduce the cost of transactions while abroad.

For Chime, the US ambition is simply to serve its customers with a good service and transparent pricing but hopes to expand its offerings in future.

Chime says there's still a huge untapped market to explore in the US with its next goal being to move beyond its currently millennial-heavy customer base into other demographics.

"When we originally went out seeking investment, people would say: 'You are nuts, why not do credit or lending?' But we've been successful so far by forming a close relationship with core investors," Britt said.

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