Chime, a mobile-only neobank for millennials, said Tuesday that it has opened 750,000 accounts to date and is signing up users at a brisk pace this month.

The growth is extraordinary. While there are many other mobile-only challenger banks in the U.S. — including Qapital, Digit and, more recently, Varo and Douugh — few have racked up large numbers yet. Chime touts a low-fee checking and savings account with a debit card and an app that provides automated savings and real-time notifications; there are no monthly or overdraft fees nor minimum-balance requirements. The Bancorp Bank holds the federally-insured accounts.

Caption: Foul fees: “The big banks all charge you $3 to $5 a month just to have a savings account, until you hit a minimum balance,” says Chris Britt, CEO of Chime. “It’s just not helpful.”
Competition everywhere?
“I believe the days of getting all your financial services from one bank brand are ending. The big banks will kick and scream the whole way,” Chime CEO Chris Britt says.

“Chime is another version of what has been offered in the past by firms like Simple, Moven and BankMobile,” said Jim Marous, owner and publisher of the Digital Banking Report. “The difference is the offering of rewards on debit purchases and an emphasis on their savings feature. Built with millennials in mind, Chime, along with other mobile-first accounts, does what digital consumers want extremely well with real-time updates, mobile alerts and elimination of friction.”

Chime says it expects to sign up 100,000 new users in January; some of that total is already reflected in the 750,000 accounts it reported Tuesday.

CEO Chris Britt chalks his company’s popularity up to having a product and app millennials like and a brand with which they feel comfortable, along with few fees.

“The big banks all charge you $3 to $5 a month just to have a savings account, until you hit a minimum balance,” Britt said. “It’s just not helpful. There’s no reason to charge people fees for that. I just read that Wells Fargo reported $1.246 billion of service charges on deposit accounts. That’s our opportunity right there.”

These levels of big-bank fee income won’t last, he said. “If you think it’s going to last forever, you’re nuts,” he said. “It’s a great opportunity to have a fresh, new way to think about basic banking in America.”

Half of Chime’s new accounts come through direct customer referrals and word of mouth, Britt said. Social media engagement, especially on Instagram and Facebook, has also driven customer acquisition. When the company posts a message, it gets mostly positive comments. Chime’s app itself also has a social element through which users can connect to one other and refer friends.

“If you ever see one of the big banks try to embrace social media, even if they’re doing posts about positive things they’re doing for the community, the first thing you see under any of their posts is a bunch of people saying, ‘You guys stole my money,’ ‘You’re crooks,’ ‘You’re charging me fees,’” Britt said. “This more connected world exposes when there are bad actors that create adversarial products.”

He cited Bank of America’s announcement Monday that it’s getting rid of free checking and requiring minimum monthly balances.

“You can either have product structures that are aligned with the consumer’s best interests, which is what we strive to do, or you can have products that are adversarial and profit from people’s misfortune,” Britt said. “That’s what big banks do and that’s being exposed.”

Chime's automated savings feature has also proven popular. Its members saved $72 million into Chime savings accounts in 2017, mostly using the “save when I spend feature,” which rounds up purchase amounts and sweeps the change into savings, according to the company. Another feature puts a percentage of each paycheck in saving.

“You’re going to increasingly see a trend toward the automation of finances as well as working with companies and brands that are authentic,” Britt said.

Over time, Britt hopes Chime will not only help people pay bills and save but have loans that make sense for them and invest for retirement.

It might end up partnering for lending or robo-advisory services.

“We want to make to make it as easy as possible for our members to have interoperability with all those services they want to use,” Britt said. “I believe the days of getting all your financial services from one bank brand are ending. The big banks will kick and scream the whole way.”