Chime Competitors: Its 10 Biggest Banking Rivals Revealed

Chime is an online banking app that offers a free checking account alongside a company-branded debit card.   

The company, which is headquartered in San Francisco, California, was founded in 2013 by Chris Britt and Ryan King.

Chime, as a so-called neobank, seeks to disrupt traditional finance by offering a number of benefits. Users, apart from not having to pay for their account, also receive free overdraft protection, fee-free ATM withdrawals, the ability to get paid earlier, and the option to earn interest on held funds.

The firm has, furthermore, expanded into other finance segments. In March 2021, for instance, Chime launched peer-to-peer (P2P) payments to snatch away market share from the likes of Venmo.

However, it has to be noted that Chime itself is not a bank. It actually partners up with another bank that provides the necessary banking license. Luckily, users can still enjoy basic protections given that accounts are FDIC-insured for up to $250,000.

Chime, unlike traditional consumer banks such as Wells Fargo, does not operate its own branches and ATM network. As a result, it is able to offer a substantially cheaper banking experience and uses portions of those savings to get rid of overdrafts and other types of fees.

In the past, Chime faced some legal troubles after it claimed that it is, in fact, a bank. In May 2021, Chime settled with the California Department of Financial Protection and Innovation, which ordered Chime to stop using the words “bank” and “chimebank” in its advertisements.

Those legal issues have luckily not impacted the firm too much. Chime is currently valued at $25 billion after having raised $2.3 billion in funding. With over 13 million users, who collectively hold over $6 billion in assets, it is considered to be the most popular neobank in the United States.

This popularity has led to revenues of $1 billion, which the firm allegedly generated in 2021. Chime makes money from interchange fees, interest on held funds, and ATM fees.

The firm, as of recently, had to postpone its plans to go public. Chime initially aimed for an IPO in 2022 but unfavorable market conditions forced it to postpone indefinitely. 

The methodology with which competitors of Chime are ranked is based on publicly available data. Information such as revenue, the number of users, assets under management, and anything else in between will be considered.

Only competitors from the United States will be taken into account since this is the only country that Chime operates in.

It has to be noted that this analysis should not be seen as an endorsement of either service. It is merely a summary of the competition that Chime faces as of today.

So, without further ado, let’s take a closer look at the top 10 competitors of Chime.

1. JPMorgan Chase & Co.

Headquarters: New York City, New York

Founder(s): Chase Manhattan Bank, J.P. Morgan & Co., Bank One, Bear Stearns, Washington Mutual

Year Founded: 2000

JPMorgan Chase is the result of a merger between a plethora of companies, with some of its founding members being over 200 years old. In fact, it is built on more than 1,200 predecessor institutions.

The firm, with close to $3 trillion in assets under management, is considered the largest bank in the United States. Consumers are primarily served via Chase Bank, which operates 5,300 branches and 15,500 ATMs across the country. It has also become the first bank to have a branch presence in all 48 contiguous states.

The cost for those ATMs and physical branches is largely recouped by the various fees Chase Bank charges. For example, it imposes fees on owning an account as well as ATM withdrawals, overdrafts, and many more. Chime has used the excessive fee structure of traditional banks such as Chase to lure in customers.

However, since Chase is an actual licensed bank, it can offer substantially more products such as auto loans or mortgages, investment accounts, and a variety of different credit card options, among many other features.

In 2021, JPMorgan Chase generated $127.20 billion in annual revenue on record-setting profits of $48.33 billion. This also includes revenue derived from its commercial and wealth management businesses, though.

That same year, Chase even expanded outside the United States for the first time and consequently launched in the United Kingdom. In its home country, Chase counts over 66 million households as customers.

Source: Chase,Insider Intelligence, JPMorgan Chase & Co., The Guardian

2. Current

Headquarters: New York City, New York

Founder(s): Stuart Sopp

Year Founded: 2015

Current, with three million users, is currently the second-biggest neobank in the United States. It offers many of the same features that Chime does including overdraft protection, a branded debit card, the ability to get paid faster, and more.

However, CEO and co-founder Sopp, who spent 20 years in finance before launching Current, has helped to build a more differentiated product. For instance, Current offers up to 4 percent in APY for money held in its savings accounts – substantially more than the 0.5 percent users get with Chime.

Additional features include automated savings (rounding up purchases and transferring the difference into a separate account) as well as the option to earn cashback rewards at participating merchants.

Current, as of April 2021, is valued at $2.2 billion. The firm has raised a total of $402.4 million in venture funding. Unfortunately, both its revenue and assets under management are currently (no pun intended) not being disclosed.

Lastly, it has to be noted that Current, much like Chime, does not hold a banking license. Instead, it derives its license from the Choice Financial Group, which is a member of the FDIC.

Source: CNBC, Crunchbase, Current

3. Venmo

Headquarters: New York City, New York

Founder(s): Andrew Kortina, Iqram Magdon-Ismail

Year Founded: 2009

Venmo is primarily known as a P2P payments app that enables users to transfer money between each other free of charge. It not only became the first widely available app to do so but has largely become popular due to its usage of communication tools such as emojis or GIFs.

However, Venmo’s social features have also meant trouble for the firm. PayPal had to settle with the FTC over a complaint about the company’s handling of privacy disclosures back in February 2018. And in March 2021, U.S. President Joe Biden had his Venmo account history publicized, which only amplified the need for more securitization.

Venmo has since expanded into a variety of other services that mimic the ones of a bank account. For example, users pay merchants, can apply for a debit or credit card, earn cashback rewards, and even purchase and sell various cryptocurrencies.  

Venmo itself has been in the hands of PayPal since 2013. It was previously acquired by Braintree for $26.2 million back in August 2012. A year later, PayPal purchased Braintree for $800 million and has been running Venmo as a separate entity ever since.

Today, Venmo boasts 83 million members in the United States. In 2021, users transferred funds worth $230 billion in total between each other. It has to be noted that Venmo, much like Chime, is not a bank, which means that funds held in those accounts are not subject to FDIC protection.

Venmo has, furthermore, become a huge money maker for PayPal. The firm currently generates around $900 million in revenue on an annual basis. In the future, it could add more banking-like features such as overdraft protections or fee-free withdrawals.

Source: eBay, TechCrunch, Venmo

4. Bank of America

Headquarters: Charlotte, North Carolina

Founder(s): BankAmerica, NationsBank

Year Founded: 1998

Bank of America is the second-biggest bank with $2.16 trillion in assets under management. However, unlike Chase, it does offer a more sophisticated experience when it comes to the usage of its digital banking services.

For example, it has created a virtual financial assistant called Erica, which answers almost any questions a customer might have. Additionally, customers can digitally book appointments with their advisor and be checked into the branch all by using their phones.

As a result, the majority of Bank of America’s customers, which total 67 million, have adopted the app. And for the ones that still need that personal touch, they can seek help in one of the firm’s 4,100 physical branches (on top of the 16,000 ATMs the firm operates).

In 2021, Bank of America generated $89.11 billion of revenue and $30.56 billion in net income. The consumer banking division makes up around 35 percent of that revenue.

Source: Bank of America, The Financial Brand

5. Cash App

Headquarters: San Francisco, California

Founder(s): Block (formerly Square)

Year Founded: 2013

The Cash App, which is maintained by Block (formerly Square), is another P2P payment app run by a tech giant. Square launched the app to compete with the likes of Venmo and PayPal. The initial use case enabled people to send money to each other (at no cost) using their phone’s email.  

Over the coming years, then-Square continued to expand the product’s functionality. In March 2015, for instance, Square added the ability to pay businesses. Months later, it became a digital wallet and finally allowed users to hold a balance.

Since then, it has introduced hundreds of new features including the ability to get paid faster, purchase and sell crypto, invest in a variety of stocks (commission-free), file one’s taxes, and apply for a debit card.

The Cash App, much like Venmo, is likely going to feature even more banking-like features to snatch customers away from traditional banks as well as Chime. Block, in 2021, purchased BNPL Afterpay for $29 billion and will likely integrate those services directly into the Cash App.

In 2021, the app generated $12.32 billion in revenue and $2.07 billion in gross profit for Block. It currently boasts 44 million active users of which 13 million are subscribed to the debit card. Unfortunately, Block does currently not disclose annual payment volumes.

Source: Cash App, SEC, TechCrunch

6. Dave

Headquarters: Los Angeles, California

Founder(s): Jason Wilk, John Wolanin, Paras Chitakar

Year Founded: 2016

Dave originated out of the founder’s frustration with overdraft fees, which they had paid their entire lives. The founding team has been publicly supported by billionaire Mark Cuban who had invested in Wilk’s previous startup as well.

This is why Dave is primarily known for its ExtraCash product, which advances customers up to $500 to pay back loans and avoid being charged with overdraft or other types of fees. Dave also offers the option to earn cashback, get paid earlier, and even find a side hustle through the platform.

The firm became the first neobank that went public as a result of its stellar growth. In January, Dave IPO’d on the Nasdaq exchange and raised $375 million during the process. At the time, investors valued the company at $4 billion.

Previously, Dave had raised $486.3 million in venture funding. The hefty capital injections have enabled the firm to attract over 11 million users. In 2021, Dave generated $157.6 million in revenue. However, the firm still continues to lose money as well ($20 million, in fact).

Source: Crunchbase, Dave, The Motley Fool

7. Wells Fargo & Co.

Headquarters: San Francisco, California

Founder(s): Henry Wells, William Fargo

Year Founded: 1852

Wells Fargo is the last banking conglomerate on this list. It places third when it comes to assets under management with around $1.92 trillion. The firm, furthermore, operates 7,200 branches and 13,000 ATMs across the country.

With over 70 million customers, it effectively serves one in three households in the United States. Its digital efforts are nothing to scoff at, either.

In 2022, Wells Fargo completely revamped its banking app, which now boasts a variety of features such as mobile check deposits, the ability to pay with Zelle, access to one’s FICO score, being able to pay your bills, and dozens more.

The year prior, in 2021, Wells Fargo’s various businesses generated $78.49 billion in revenue. The Consumer Banking and Lending division accounted for $34.88 billion of that.

Source: Wells Fargo

8. Varo

Headquarters: San Francisco, California

Founder(s): Assaf Guery, Colin Walsh, Mykola Klymenko, Roger Van Duinen

Year Founded: 2015

Varo, in February 2020, became the first neobank in the United States to be awarded a banking license. As a result, it is able to offer the same basic assurances such as FDIC insurance of up to $250,000.

Being a licensed bank will allow Varo to, furthermore, provide products such as lending, which the firm has experimented with in the past.

Other than that, Varo offers many of the same features that one can find at Chime. These include fee-free ATM withdrawals, overdraft protection, a branded debit card, and the ability to get paid earlier.

Varo markets itself to the working class and, as such, also promises that it won’t conduct any credit checks nor require a minimum balance to be deposited. Its approach to appeal to the masses has yielded Varo four million members thus far.

The firm is currently being valued at $2.5 billion after having raised $992.4 million in venture funding. It counts NBA star Russell Westbrook and investors such as BlackRock as advisors as well as backers.

Source: CNBC, Crunchbase, Varo

9. Aspiration

Headquarters: Marina Del Rey, California

Founder(s): Andrei Cherny, Joseph N. Sanberg

Year Founded: 2013

Aspiration separates itself from the pack by offering a bank account that focuses on impact first. The firm promises that it won’t invest money into harmful practices such as building oil pipelines, mining for coal, or drilling in the Arctic.

The app, furthermore, works together with reforestation partners around the globe to plant trees. Its Aspiration Impact Measurement (AIM) score also provides customers with insights into how their spending affects the environment.

This had led celebrities such as Leonardo DiCaprio and Robert Downey Jr, alongside investors such as Social Impact Finance, to invest a total of $250 million into the company. Aspiration is currently in the process of becoming a public company by finalizing a SPAC merger with InterPrivate III Financial Partners at a valuation of $2.3 billion.

However, not everything has been going well for the firm. Reporting by ProPublica, for example, highlighted that the firm overreports the number of trees it plants as well as overstates its user numbers. Aspiration claims to have five million members, which according to an investor presentation is only slightly above 600,000.

Nevertheless, the firm has used its sustainability focus to grow at a rapid pace. In 2021, Aspiration generated $100.6 million in annual revenue, up 584 percent from $14.7 million in 2020.

Source: Aspiration, Crunchbase, ProPublica, Reuters

10. Robinhood

Headquarters: Menlo Park, California

Founder(s): Baiju Bhatt, Vlad Tenev

Year Founded: 2013

While Robinhood is primarily known as an app that enables users to invest in crypto and stocks at no cost, it also features much of the same functionality that Chime has.

In fact, back in 2019, Robinhood actually tried to get a banking license to offer customers products such as lending. However, it ultimately withdrew that application on a voluntary basis.

Today, Robinhood offers a few banking-like features that include a branded debit card, automated savings, the ability to earn cashback rewards or send checks, and no ATM or overdraft fees. Its accounts are even FDIC-insured for up to $250,000.

Robinhood has been well-capitalized, which enabled the company to expand into a variety of financial products. So far, it has raised $6.2 billion in funding. On top of that, Robinhood went public back in July 2021, which netted the app another $2.1 billion.

The firm, furthermore, boasts close to 22 million members who hold around $98 billion in assets combined. In 2021, the firm generated $1.82 billion in revenue, up 89 percent from the year prior.

However, Robinhood has also been embroiled in a variety of scandals. For instance, one of its traders took his life after a misunderstanding about what he owed the company. Additionally, Robinhood has been repeatedly criticized for the way it makes money, which is primarily through payment for order flow.

Source: CNBC, Crunchbase, Robinhood

Honorable Mentions

Commercial Banking in the United States alone is a market worth over $860 billion. Naturally, there are thousands of similar and tangentially related services trying to outgun each other.

For once, there are a plethora of other neobanks trying to separate themselves from Chime and traditional banks.

For example, European neobanks such as N26 and Revolut have expanded into the United States. However, at least the former closed down operations back in January 2022.

Similarly, local neobanks, including OnJuno or Sable, have all raised tens of millions to compete against the existing players. Some of them try to separate themselves from the pack by focusing on a specific customer demographic such as older people or travelers.

As of January 2022, there were also close to 5,000 licensed commercial banks in the United States alone.

Some of the biggest ones that were excluded from this list include Citi, PNC, Capital One, Goldman Sachs, Morgan Stanley, and many others.

Lastly, investment apps have begun to engrain themselves more and more into their users’ financial lives. Apps such as Acorns, M1 Finance, and SoFi have all launched various savings and spending features that rival those of traditional and technologically-enabled banks.

Hi folks, Viktor checking in! Years of experience in various tech-related roles have led me to start this blog, which I hope provides you with as much enjoyment to read as I have writing the content.