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Mobile Banking app Chime sees record number of new account openings

Chris Britt, Chime's co-founder & CEO, joined Yahoo Finance's Jen Rogers, Myles Udland, Dan Roberts, and Melody Hahm to discuss how the company is helping customers get their stimulus checks as well as the surge in new account opening they've seen this week.

Video Transcript

MYLES UDLAND: So we spent a lot of time on this program talking about the PPP program, which is money getting out to small businesses. We've spent less time talking about the cares act those $1,200 stimulus checks started going out to consumers this week. I want to bring in Chris Britt, he's the Chime co-founder and CEO, to talk a little bit more about what is happening with the distribution of this money.

And Chris, a program you guys had to get this money into the hands of your customers faster. Tell us a little bit about the state of play, I guess, when it comes to dispersing these stimulus checks that I think many consumers have been eagerly awaiting. And you know, look, maybe it's too late, but the money has come out. What did you guys do kind of in the interim to help your customers?

CHRIS BRITT: Yeah, definitely. Thanks for having me today. Chime offers basic banking services for millions of people, and we believe that basic banking services should be fast, free, easy. And we just want to be helpful. So we were really encouraged by the aggressive actions that the government has taken, both through the PPP program but also the direct-to-consumer stimulus payments. And we saw that while they were certainly intending to be very aggressive in terms of the amount of money that they're going to put into the system, a lot of our members were giving us feedback, wow, I wish we could get access to those payments, even sooner.

So that's something that Chime is known for. We give people access to their paychecks a couple days early. We let people go overdraft without charging them fees. And so what we did is when we saw from the Federal Reserve that these ACH payments would be arriving this week-- they were scheduled to arrive on Wednesday-- we started to release those payments early.

And beginning on Friday of last week, we gave early access to $1.1 billion of stimulus payments to Chime members. And so obviously, that created a lot of excitement among our Chime members around the fact that they were able to use those for important purchases, especially given all the difficult conditions many of them are living with, losing jobs or, you know, moving between jobs, and so forth.

DAN ROBERTS: Chris, Dan Roberts here. How do you go about kind of getting the word out right now that this was an option, to have the help come from Chime? Because fair to say, you know, not yet a big household name. And if you use PPP as an example-- I know we're not talking about PPP loans necessarily-- but we heard from so many small businesses that just by default thought, well, I'll go through my big bank that I use.

I use Chase, or I use B of A. And they either applied and didn't hear for two weeks and then found out today or yesterday, you didn't get it. Or they applied and were approved and still haven't seen the money, whereas the few examples I've found of small businesses that got approved and then got the money quickly, they went through small regional banks. But many just don't know that there are other options out here. They may not have heard of Chime, and it's a weird time to try to do that marketing right now for your service.

CHRIS BRITT: Yeah, right. Look, we're not doing this as a big marketing campaign. We're actually doing it because we believe philosophically that your banking service provider should be helpful and always have your back. And so I'm really proud that our team moved so quickly to really walk the talk in that regard.

You know, I'd say the best way to get the word out in any product category is when your customers tell their friends about it. And we're in a fortunate position where we get almost half of our new accounts every month come from referrals and word of mouth and organic. And over the last few days-- we actually weren't fully anticipating this, but the last few days have been the largest enrollment days in the history of our company.

And we're actually a pretty big company. We've got millions of customers. But just in last three days, we've opened up over 100,000 new checking accounts from referrals and word of mouth and the buzz that we've gotten. So we're pretty excited about that, not only that we can help our existing Chime members, but that it's starting to be clear to us, there's an even larger segment of Americans that would appreciate services that are real-time and helpful and don't rely on fee income.

You know, I heard all these-- all the big banks have agreed to not charge overdraft fees for the next couple of months, given the crisis. We believe you shouldn't charge overdraft fees at all. So we don't need to roll them back because we don't charge them to begin with. And that's how banking services should be in America, at least in our opinion

JEN ROGERS: Hey, Chris, the overdraft fees brings me to I think something that surprised a lot of people was that some banks are actually keeping customer stimulus checks if those accounts are overdrawn. They're basically garnishing the stimulus payment. Is that something that if somebody had an overdraft at Chime that you would do? What do you think about that? Is that just the kind of course of doing business in banking?

CHRIS BRITT: You know, I don't want to comment on the policies. Everyone's dealing with a lot. Everything's happening so quickly, so I didn't come on here to rail against big banks because everyone's doing their best to try to be helpful in this environment. The way we deal with overdraft at Chime is we have a service called SpotMe. And for any member that signs up for payroll direct deposit of their paycheck that comes into the account on an ongoing basis, we allow you to take the account into a negative state up to $100 before your next pay period comes, and we don't charge you any fee for that. When the next payment come-- when your next paycheck comes, we simply pay ourselves back, and we don't charge a $35 fee for that.

What we actually did in advance of this past Friday where we advanced the billion dollars, we actually-- for a number of our members, we increased the levels of SpotMe, our overdraft service, to even higher levels to give people a little extra cushion. So we gave over 100,000 people access to additional spending power, between $200 and $1,200 of additional spending power. And we got a lot of praise for that as well.

So again, we're just trying to be nimble. We're really a consumer technology company. We're not really a bank. We offer banking services, but we think of ourselves more as a-- you know, we want to be a helpful consumer product. And because we're sort of a Silicon Valley technology company, we can probably move a little faster than a traditional, large FI.

MELODY HAHM: And Chris, speaking of that demographic you're trying to really cater to, as I understand it, you have been in discussion with the Treasury Department to figure out further avenues, right? To reach those consumers who perhaps don't actually-- are unbanked or do you not have a checking account. Can you give us an update there?

CHRIS BRITT: Yeah, the government has moved very quickly and have been very constructive talking with us and I know a number of other fintechs that want to be supportive. You can go to the IRS.gov website right now and hit on the Get My Payment button. It's right there on the home page. And you can check the status of payments. If you-- if they don't have your routing and account number of your bank account on file, you can plug your number in. If you plug in a Chime routing and account number, you-- that is one way to get paid and one way to get paid even faster than you would with a traditional bank account.

Yeah, look, we've reached out to the government. We've had some constructive conversations. We've-- we are-- we would be willing to, you know, mail cards to people for free, give them virtual accounts. Anything that we can do to make things easier, we-- look, if you're going to be waiting on a check, my understanding is that check might arrive anywhere from two to 20 weeks from now.

So if they don't have your information on file, I strongly encourage people to sign up for an account somewhere and plug in a routing and account number. And that's a way faster way to get access to your payments than waiting for a physical check and then maybe having to go pay a fee to cash it and so forth. So we've offered up, you know, Chime as an option. In the meantime, we'll just continue to try to get the word out through social media and through our members that we would be a great option to help facilitate that.

MYLES UDLAND: All right, Chris Britt is the co-founder and CEO of Chime. Thanks for joining the program, and hopefully we can talk to you soon.

CHRIS BRITT: Thank you.