Latest news with #MadhuMuthukumar
Yahoo
31-03-2025
- Business
- Yahoo
IPO-bound Chime hopes to boost growth by paying higher interest rates
As it gears up to go public, Chime is going all in on new features in an effort to attract more customers. The digital bank is offering customers who agree to have their paychecks directly deposited into a Chime savings or checking account an APY of 3.75%, it tells TechCrunch exclusively. For those who don't choose to direct deposit, the interest rate of 2% for standard users is still competitive. By comparison, the national average savings account yield is 0.61% APY, according to Bankrate's survey of institutions as of the week of March 24. While Chime Chief Product Officer Madhu Muthukumar didn't say it outright, the move appears to be one at least in part aimed at attracting more stickiness among customers. As of last summer, Chime had 7 million customers and $1.5 billion in annualized revenue, according to reporting by Forbes. The company declined to provide updated figures. In December, Chime filed confidential paperwork to go public with the U.S. Securities and Exchange Commission. Chime was last valued at $25 billion when it raised $1 billion at the height of the valuation frenzy of 2021, and has raised $2.65 billion total, PitchBook estimates. Its investors include Forerunner Ventures, Menlo Ventures, Crosslink Capital, Sequoia, SoftBank, Tiger Global, and many others. The company also declined to comment on potential IPO timing. To be eligible for the 3.7% APY, Chime customers must agree to become members of Chime+, a premium membership tier that requires the agreement to direct deposit their paychecks. There is no charge to join as a premium member. Founded in 2012, Chime markets itself as the bank alternative for everyday Americans. It touts that it doesn't charge overdraft, maintenance, or low balance fees or require account minimums. 'These are people who you would find in your community, whether they make a coffee in your local store, teach your children, deliver a package, or help you find something in your big box retailer,' Muthukumar said.' This is your neighbor.' Its customer base skews slightly female, he told TechCrunch, with members more in the 30s age range as opposed to 'super young folks' and are 'gainfully employed.' In 2020, Chime began offering a credit card that it claims helps users build and improve their credit by setting purchase limits based on account balance and acting more like a debit card. Now, members no longer have to direct deposit through Chime to apply for and use Chime's Credit Builder Visa credit card. Other features that Chime is announcing Monday include a redesigned app, an expanded set of 'deals' or discounts specifically for Chime users, cashback offers, and 'dedicated' customer support. On March 21, it also announced a new 'instant loans' product. Financial technology companies continue to get creative in attempting to woo customers. Last week, Robinhood announced that it was going to begin offering wealth management and private banking services to retail investors, touting that such services were 'no longer reserved for the wealthy.' As part of that new offering, Robinhood says it will provide a 4% APY on savings as well as assistance with estate planning and taxes, among other things. Uniquely, it also will offer cash delivery to a user's doorstep. Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
Chime adds instant loans
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Neobank Chime has rolled out instant loans, offering customers access to up to $500 at a fixed interest rate, without having to go through a credit check, the company said. The product, launched Friday, will offer three-month installment loans to pre-approved Chime customers who use the fintech's checking account for direct deposits. Chime will tap its technology and data sources to determine loan eligibility, and customers pre-approved for a loan will be notified through the Chime app. The product 'is the latest way Chime is helping to unlock financial progress for everyday Americans,' Madhu Muthukumar, chief product officer at Chime, said via email. 'Early feedback on Instant Loans has been overwhelmingly positive, with extremely high customer satisfaction. We believe this reflects our members' trust in Chime's transparent, helpful, and fair financial tools that meet their day-to-day needs,' he added. Chime has been testing the product for quite some time, and it takes seconds to get a loan, a Chime spokesperson said. The loan offering carries no fees for origination, prepayment, or late payment but comes with a fixed rate of $5 for every $100 borrowed, which can be paid back in three monthly installments of $35 for each $100 – roughly a 29.76% annual percentage rate. Since loans are disbursed in $100 increments, the minimum amount to apply for is $100, the spokesperson noted. Customers can opt-in for automated monthly repayments, which have been built to not exceed 10% of monthly cash inflows, the company said. Chime reports on-time payments to credit reporting agencies. 'As members take an Instant Loan, we clearly explain what they are signing up for, and when payments are due — with no hidden costs or compounding interest traps,' Muthukumar said. Founded in 2012 by Chris Britt and Ryan King, Chime touts itself as a digital banking alternative offering fee-free banking. The firm has around 7 million customers, who use its cards for $8 billion in monthly transactions, Forbes reported. According to a survey by Cornerstone Advisors, half of Chime customers consider the neobank their primary checking account provider. The survey compared this to fintechs like SoFi, MoneyLion, Cash App and Current, which typically see about 25% of their customers treating them as a primary banking or payment solution. Chime's instant loan offering follows the neobank's launch of a suite of products last year. In May, Chime unveiled MyPay, offering early access to up to $500 of customer's paycheck, including government benefits, without interest, credit checks, or mandatory fees. In August, the firm expanded its SpotMe feature, a fee-free overdraft service Chime launched in 2019. The new integration allows members to access up to $200 in overdraft coverage when using their credit builder Visa credit card. SpotMe surpassed $30 billion in transactions last year, according to the company. The Bancorp Bank is Chime's banking partner, providing instant loans. Chime also partners with Stride Bank to offer its other banking products. Chime has been exploring options for its initial public offering and had tapped Morgan Stanley for the process, Bloomberg reported in September, citing people familiar with the matter. In December, the publication reported the fintech submitted a confidential filing with the U.S. government for its IPO, aiming to go public this year. Chime declined to comment on its IPO status. Fintech competitors such as Dave have been eager to offer instant loans to give customers access to convenient financing. Dave promised its customers $500 in 5 minutes or less, a cash advance that customers can receive without credit checks, interest or late fees through its ExtraCash account. However, the Federal Trade Commission sued the Los Angeles-based firm, claiming Dave allegedly misled consumers and 'lured' them to its cash advance application, guaranteeing them up to $500 in loans, which they failed to receive. The FTC also noted that the online platform charged consumers who needed financial assistance with undisclosed fees and 'tips' without their consent.
Yahoo
24-03-2025
- Business
- Yahoo
Fintech firm Chime launches Instant Loans
Chime, a consumer financial technology company, has introduced Instant Loans to provide pre-approved members with immediate funding access of up to $500. This new offering offers a fixed interest rate and are available to Chime members who receive direct deposits into their Chime Checking Account. Eligible members are notified within the Chime app and get instant access to funds. The firm does not seek credit check for Instant Loans, but utilises its proprietary platform and data sources to assess eligibility. Repayments are structured over three months, with no late fees or compound interest. The cost is set at $5 for every $100 borrowed, equating to a 29.76% annual percentage rate. Payments are designed to be affordable, with automated options ensuring they do not surpass 10% of a member's monthly cash inflow. Chime reports on-time repayments to credit bureaus, allowing members to build credit. According to a prior simulation with Experian, participants who consistently make payments on time could see their credit scores rise by 10 to 30 points. The launch of Instant Loans follows other financial products introduced by Chime, including MyPay, which allows members to access up to $500 of their earnings before payday without interest or a credit check. Additionally, Chime's SpotMe feature enables fee-free overdrafts, covering over $30bn in transactions in 2024. Chime chief product officer Madhu Muthukumar said: 'We are relentlessly focused on helping everyday people achieve financial progress. 'Our members have told us that they want simple and transparent tools to access money when they need it, and to help them build credit — and we're excited Instant Loans provides both to our members.' In December 2024, a Bloomberg report said that Chime Financial confidentially filed for an initial public offering (IPO), appointing Morgan Stanley to lead the process. "Fintech firm Chime launches Instant Loans" was originally created and published by Retail Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Associated Press
21-03-2025
- Business
- Associated Press
Chime Introduces Instant Loans
Leading consumer financial technology company Chime® announced today the launch of Instant Loans—a product that provides instant access to up to $500 in funds with a fixed interest rate that is lower than what's typically observed in the industry. Like all of Chime's services, Instant Loans is easy to use and transparent, and unlike some other loan products, there is no credit check to qualify. Instead, Chime leverages its proprietary technology platform and rich data sources to help determine eligibility. On-time payments can also help members build credit over time. Instant Loans offers three-month installment loans up to $500 to pre-approved Chime members who receive direct deposits to their Chime Checking Account. Members are pre-approved for a loan and notified of their eligibility within the Chime app. Once accepted, eligible members gain instant access to the loan funds. When compared to other types of liquidity products on the market, Instant Loans enables consumers to borrow at potentially half the cost, and with the added flexibility of having up to three times longer to repay. 1 Chime's Instant Loans has no late fees or compound interest, just a fixed interest rate of $5 per month for every $100 borrowed, paid back in three monthly payments of $35.00 per $100 borrowed (29.76% annual percentage rate). For greater ease, repayments can be automated and are designed to not exceed 10% of monthly member cash inflows to ensure affordability. Chime also reports on-time payment history to credit reporting agencies, allowing members to build credit. Participants who pay on time may see their credit score increase by 10-30 points, validated by a prior simulation conducted with Experian 2. 'We are relentlessly focused on helping everyday people achieve financial progress,' said Madhu Muthukumar, Chime's Chief Product Officer. 'Our members have told us that they want simple and transparent tools to access money when they need it, and to help them build credit — and we're excited Instant Loans provides both to our members.' Instant Loans is Chime's latest innovation, building on its commitment to enabling financial progress through products centered around consumer needs. In 2024, Chime announced the launch of MyPay, which lets eligible members access up to $500 3 of their pay before payday with no interest 4 and no credit check. Since its official launch in July 2024, MyPay has helped members access billions of dollars. SpotMe 5, which allows Chime members to overdraw their account without fees, also surpassed a major milestone in 2024, covering more than $30 billion in transactions. The Chime Checking Account was one of the first full-featured accounts to disrupt the traditional banking industry by offering fee-free overdrafts with the launch of SpotMe. Similarly, millions of people have increased their credit scores since opening a Chime Credit Builder Visa® Credit Card, which doesn't charge interest or require a credit check or minimum security deposit. About Chime Chime is a financial technology company founded on the premise that basic banking services should be helpful, easy, and free. Chime builds products that allow the company to succeed when its members do. That's why Chime doesn't rely on punitive fees such as overdraft, monthly service, or minimum balance fees. Member deposits are FDIC-insured through The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, up to applicable limits. 6 For additional information, please visit Instant Loans are made by The Bancorp Bank, N.A. The secured Chime Credit Builder Visa Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. 1 Comparable offerings include product offerings by Varo Advance (APR approximately 95%, payback in 1 month), Cash App Borrow (APR range of 60-70%, payback in 1 month) and Possible Finance (APR range of 50-240%, payback in 2 months). 2 Experian simulation indicated members with a positive payment history would realize a positive impact in their Vantage Score 3, with larger increases in deep subprime and thin file members. 3 MyPay is a line of credit. To be eligible for MyPay, you must receive qualifying direct deposits to your Chime Checking Account as set forth in the MyPay Agreement. A qualifying direct deposit is a deposit from an employer, payroll provider, gig economy payer, government benefits payer, or other permitted source of income by Automated Clearing House ('ACH') or Original Credit Transaction ('OCT'). Your MyPay Credit Limit and Available Advance Amount may change at any time. MyPay is a line of credit and available limits are based on estimated income and risk-based criteria. Eligible members may be offered a $20 - $500 Credit Limit per pay period. Your Credit Limit and Maximum Available Advance will be displayed to you within the Chime app. MyPay is currently only available to eligible Chime members in certain states. Other restrictions may apply. See Bancorp MyPay Agreement or Stride MyPay Agreement for details. 4 Option to get funds instantly for $2 per advance or get funds for free within 24 hours. See MyPay Agreement for details. 5 SpotMe® for/on Credit Builder is an optional, no interest/no fee overdraft line of credit tied to the Secured Deposit Account; SpotMe on Debit is an optional, no fee service attached to your Chime Checking Account (individually or collectively, 'SpotMe'). Eligibility for SpotMe requires $200 or more in qualifying direct deposits to your Chime Checking Account each month. Qualifying members will be allowed to overdraw their Chime Checking Account and/or their Secured Deposit Account up to $20 in total, but may be later eligible for a higher combined limit of up to $200 or more based on member's Chime account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your SpotMe Limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your SpotMe Limit. SpotMe for Credit Builder and SpotMe on Debit share a single SpotMe limit. Your SpotMe Limit may change at any time, at Chime or its banking partners' discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions or OTC cash withdrawal fees at retailers. SpotMe won't cover non card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe Terms and Conditions. 6 Chime is not FDIC-insured. The Bancorp Bank, N.A. and Stride Bank, N.A. are the FDIC-insured members. Deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply. SOURCE: Chime Copyright Business Wire 2025. PUB: 03/21/2025 09:00 AM/DISC: 03/21/2025 09:00 AM
