America's Fastest Growing Digital Bank with Chime
Ryan King is the Co-Founder and CTO of Chime, one of the leading digital banks in the US. Chime offers free banking to over three million customers, helping them save hundreds a year on banking and gain control of their financial lives.
This episode was recorded at LendIt in San Francisco. A huge thanks to Peter Renton and his team for inviting us to participate.
As listeners know, digital banking is a space we follow closely. The US is a fascinating market to watch, given the importance of spending, borrowing and investing, prevailing incumbent pricing structures, digital penetration and customer expectations. And with the number of well-funded fintechs converging on comprehensive digital financial offerings, including Robinhood, Acorns, Betterment, MoneyLion, Chime, Varo and others, not to mention European digital banks like Monzo, N26 and Revolut, the space will get competitive fast.
Thank you very much for joining us today. Please welcome, Ryan King.
Will:
You're the co-founder and CTO of Chime. Tell us a bit about Chime.
Ryan:
Chime is a modern mobile challenger bank in the U.S. Our product is simple, free, and easy to use. We’ve opened about 3 million accounts, which makes us the largest and leading challenger bank in the U.S. Right now, we’re opening a couple hundred thousand new accounts every month, so I think we’re doing something right.
Will:
You mentioned "free" as a point of differentiation. For our international listeners, can you describe the traditional banking offering in the U.S., and what makes Chime different?
Ryan:
Sure. Most Americans typically have a bank account at one of the four large U.S. banks — Chase, Wells Fargo, Citibank, or Bank of America. For many, especially middle- and lower-income Americans, that account comes with a significant cost — usually between $300 and $400 a year in fees for a basic checking account.
We call it a checking account here; I know elsewhere it's called a current account. A lot of those fees come from monthly maintenance charges and overdraft fees, which make up a big part of bank revenue.
Ironically, for higher-income Americans, financial services become less expensive. We’ve set out to change that dynamic.
Will:
Yeah. And I think you’ve got some stats on the average revenue streams for traditional banks — I believe you have those figures handy?
Ryan:
Yeah. You can actually see this data in public filings — these are all publicly traded companies, after all. Take Wells Fargo, for example. A couple of weeks ago, they released their quarterly earnings, and one of the line items was something like “service fees on deposit accounts.”
Last quarter, Wells Fargo reported $1 billion in service fees on deposit accounts. That’s money they’re charging Americans — for the privilege of letting the bank hold their money — so they can then lend it out, earn interest margin, and generate other forms of income.
Will:
Tell us a bit about your background. You’ve done some really interesting work, and I think some of that experience helped shape your expectations — especially around Chime.
Ryan:
Yeah, absolutely. My professional story starts around the time of the first internet boom. I graduated from Stanford in 1999 with a computer science degree. As I was wrapping up, I took a class from Larry Page and Sergey Brin — yes, that Larry and Sergey from Google. The course was titled Search and the Web, which at the time were still pretty novel subjects for a class.
But it wasn’t really a traditional class. It was more like an early recruiting effort — they were trying to get students to join their little basement project. Obviously, it worked out pretty well for them.
I worked on a project with them to build a link graph of the internet — basically what became the foundation of their search algorithm, their secret sauce. But I declined to keep working with them after the course ended. I remember thinking, “Who needs another search engine?” We had Lycos, AltaVista, Yahoo, Excite — there were already plenty. I didn’t see the need for another one. So I passed.
Instead, I joined a startup that went public shortly after I joined. It hit a $10 billion valuation — and then went to zero. I got to ride the full rollercoaster of the first dot-com bubble. It was a great learning experience.
After that, I teamed up with Sean Parker — who later played a big role at Facebook — to start a company called Plaxo. We were early to the social networking space and basically invented viral growth on the internet. All those connection requests, “invite your friends” features — we were some of the first to build that. We offered a valuable product for free and got to 20 million users without ever spending a dollar on marketing.
From a user growth and impact perspective, it was a huge success. But we never really cracked the business model in the way that, say, LinkedIn did in the professional networking space. So we ended up selling the company — just ahead of the 2008 economic meltdown, which, in hindsight, was well timed, since most VCs pulled back investment at that point.
A couple of years later, I met my co-founder Chris and we started Chime. In many ways, I’m relatively new to fintech. I didn’t grow up in the industry. But what attracted me to it was the opportunity to make a huge impact in people’s lives — and to build a sustainable business in the process. That combination was really compelling to me.
Will:
How important are social and viral elements to what you’re doing at Chime?
Ryan:
They’re pretty important. Financial services, with a few exceptions, isn’t usually an inherently social or viral product category. The exceptions tend to be in peer-to-peer payments — platforms like Venmo in the U.S., or other P2P networks globally.
What we’ve found is that when you offer a product people love — especially in a category full of bad actors charging high fees to middle and lower-income Americans — customers want to tell their friends about it. Word of mouth becomes really powerful.
Right now, around 30 to 40 percent of our new account openings come from referrals — people telling their friends about Chime.
Will:
As CTO, I think you're the guy to ask about how you approached the architecture of the business. What motivated your design decisions, and how did you land on the choice not to pursue a banking license?
Ryan:
Yeah — the conventional wisdom was that you couldn’t build a profitable business offering a free checking account. And that was largely because of how the economics of banking work.
There are four core pieces you need to offer a checking account. First, you need a bank charter. In the UK and Europe, that’s been a bit easier for companies to obtain. But in the U.S., it's incredibly difficult. No tech company has succeeded in getting a U.S. bank charter in the last decade, although that’s starting to change.
Second, you need a core deposit system — the back end of the bank account. Third, you need a card transaction processing system so your customers can actually use their accounts to make purchases. And fourth, you need a payment network like Visa, Mastercard, Amex, or Discover.
Most companies that came before us — and all of the early fintechs — took a shortcut to get to market by renting or buying all four of those components off the shelf. The problem we saw with that approach was the cost. In the U.S., the cost of renting all four components exceeds the amount of revenue you can generate — even on uncapped debit interchange.
So we made a very deliberate decision to cut out as much of the cost as possible, as quickly as possible. If we wanted to eliminate all of it, we would’ve gone and applied for a bank charter and tried to build our own global payments network — but that would’ve taken forever.
Instead, we focused on building as much of the technology stack in the middle as we could — the core deposit system and the card transaction processor. That allowed us to lower the cost dramatically, which in turn let us go to market with a free checking account that could actually generate a profit.
Will:
If you really distill it down—why? Why have 3 million people decided to join Chime? What are the one or two core reasons that people sign up and actually use it?
Ryan:
We primarily serve the 160 million Americans who live paycheck to paycheck. That’s our focus. So to answer your question—what’s the hook? Why do people sign up?—we get asked that a lot. And right now, there are a few core reasons that really resonate.
First, we offer early access to wages. Most people get paid every two weeks on Friday. With Chime, you get your paycheck on Wednesday. It’s simple to understand, and it’s a huge benefit for people who live paycheck to paycheck.
Second, the account is free. Most of our customers use it without paying any fees, which is a stark contrast to what they might be used to with traditional banks.
Third, we help people build savings automatically. One stat I like to quote: about half of Americans don’t have even $1,000 in emergency savings. People know they should have a rainy-day fund—finance 101—but they don’t always know how to change their behavior to build one. We give them tools to do that passively, which makes a big difference.
And then there’s one more thing—something that becomes obvious once people start using Chime, but is less obvious from the outside. We help our users stay on top of their money. We send around 100 push notifications a month per user. That includes updates when they wake up—“Here’s your balance”—when they make a transaction, when they get a deposit, and so on.
For someone living paycheck to paycheck, that kind of real-time visibility removes a lot of the anxiety that comes with managing money day to day. You’re not walking into a coffee shop wondering if you can afford a donut or a coffee. You know where you stand at all times. And that’s incredibly empowering.
Will:
When you talk about serving people living paycheck to paycheck, who exactly is that? Is it people in their 40s working blue-collar jobs, or 23-year-olds in their first jobs?
Ryan:
We tend to skew a bit younger than the general U.S. population. Our median customer age is probably around 27 or 28. So for most of our users, this isn’t their first bank account.
A typical story we hear is something like this: someone had a Wells Fargo account their mom set up when they were 12. They didn’t really incur any costs with it, even through college. A lot of the big banks offer low-cost or even free accounts for students.
But then they graduate, start working, and suddenly realize they’re paying a lot in fees—and they’re not getting much in return. That’s often the moment they go looking for an alternative, and that’s when they find Chime.
Will:
One of the criticisms—or at least challenges—often raised about digital banks, especially in the UK and other markets, is around whether people use them as a primary account or a secondary account.
Do you get the sense that your users treat Chime as their primary account? Or do they link it to an existing traditional account and use it more as a stepping stone?
Ryan:
Yeah, we do allow people to connect their existing bank account, but that’s mostly to make it easy for them to transfer any money they might have elsewhere. It’s really just about facilitating that trial experience.
But the way we market the product—and the way we serve customers best—is when they make Chime their primary account. That’s where we see the most value created. Almost all of our transaction activity comes from customers for whom this is their main, and in many cases only, bank account.
Something like 75 to 80 percent of our users treat Chime as their primary account.
Will:
Right. And the fact that you’re saving them so much money probably shifts the dynamic compared to other markets—like the UK—where current accounts are often free anyway.
Ryan:
Exactly. And going back to what I mentioned earlier about our hook—one of the biggest value props is early access to paychecks. That only works if your paycheck is being deposited into Chime. And once that happens, by default, Chime becomes your primary account.
Will:
Makes sense. As a starting point, it’s pretty compelling. You can either pay $300 or $400 a year—or you can pay nothing.
I think one of the biggest challenges banks have created for themselves—at least here in the U.S.—is the adversarial dynamic they’ve built with their own customers. They’re supposed to help people manage their money, support financial flexibility, and help customers achieve their goals. But at the same time, they’re charging fees and extracting value along the way. There's a natural tension in that model.
As you think about where Chime goes from here—other products you might introduce, ways you might expand—what’s the best way to align Chime’s incentives and product set with the best interests of your customers? How do you make it genuinely feel like you’re all working toward the same goal?
Ryan:
Yeah, it’s a good question — and it’s something we think about a lot. It starts with our mission. Chime’s mission is to improve the financial health of everyday Americans. With that in mind, we break financial health down into four categories: spending, saving, borrowing, and investing.
Very clearly, our entry point into the market has been in the spending category. For each of those four areas, we think very intentionally about how to align our business model with our mission.
In spending, we did that by creating a free account. We eliminated fees and instead generate revenue through interchange. That structure is aligned with the customer’s interest.
In savings, we know having an emergency fund is critical for financial health. So we help people set goals and build savings — not just for emergencies, but for other things too. And again, we’ll align our business model in a way where, if customers succeed and improve their financial health, that’s also good for our business. That alignment is key.
As we move into lending and investing, the same logic applies. As we build out products in those areas, we’ll look for opportunities to align incentives the way we did with the checking account — probably doing things a bit differently from traditional players.
We’re not trying to be overly prescriptive or paternalistic about how people manage their money. But we do know that financial health comes from smart allocation across those four categories. So as we expand our product set, we’ll be intentional about ensuring that alignment is real — not just a tagline in our marketing.
Will:
Do you expect to incorporate more financial well-being tools — things like feedback loops, nudges, or personalized insights? Given your visibility into not just a single user’s financial activity, but also trends across your whole user base, is there an opportunity to build more layers that help guide users toward better decisions?
Ryan:
Yeah, it's a good question. I think when we think about. Financial health, we think about it really as a behavioral psychology problem for, there's sort of two ways to change people's financial health. Either you can boost their income or you can change their behavior or on how they allocate their income.
And, and we think a lot about the latter, uh, you know, and, and having, and starting with capturing people's primary paycheck. That gives us a lot of power to affect their behavior about how they allocate it. And we, so your question was about tools and analytics and sort of the sort of PFME type of stuff.
Um, we're gonna do a little bit of that, but we're making a stronger bet on automation. And technology, you know, technology powered automation to actually drive that behavior change. So if you take someone who lives paycheck to paycheck and spends everything they make and doesn't have any emergency savings, you know, let's introduce some automation where all we have to do is get you to trust us and turn it on, and you believe that it's the right thing for you and we'll take care of the rest.
So that's sort of the vision. If you look at the most successful products. In the history of time in optimizing financial health in the US we have this retirement construct called a 401k, which has been by far the most successful on that, along that regard, because it's automatic, your employer takes the money out, puts it aside before you ever see it.
And so we wanna sort of take that same hypothesis of automation is the way to affect behavioral change and apply it across all those categories. It it, it's probably
Will:
It’s probably worth digging in a bit to the business model — specifically the interchange component and how the free account is funded. For listeners outside the U.S. who might not be familiar with the U.S. interchange model, could you give a quick overview?
Ryan:
Yeah, it’s actually quite different in the U.S. compared to most of the rest of the world — and that difference is what created the opportunity for a business like Chime.
The way to think about it is this: in the U.S., there are roughly three broad tiers of interchange revenue that issuing banks can earn. Of course, debit and credit are structured differently, but just focusing on debit for a moment:
First, there’s the interchange earned by big banks — and that’s similar to what you’d see in Europe and most other regions. It’s quite low. The cap is actually set at 21 cents plus five basis points. That cap was introduced in 2012, which not coincidentally is the year we started Chime.
The effect of that cap was that free checking basically disappeared for most Americans. Big banks used to earn higher interchange, and when the cap came in, they responded by increasing account fees to make up the lost revenue.
That capped tier accounts for about 80% of debit card transactions in the U.S.
Then there’s the other 20% — which includes smaller banks and fintechs like us — that are not subject to the cap. Chime falls into this category, and we earn around 1.5%, or 150 basis points, on debit interchange.
And finally, if you go into credit card territory, that’s where you see even higher interchange — usually in the 2.5% to 3% range. That’s what powers all the high-end rewards cards you see everywhere in the U.S.
Will:
Can merchants discriminate based on card issuer — based on who’s collecting the interchange?
Ryan:
They certainly can Technically, uh, they, they have the technical power to do so, but Visa makes it.
It strongly discourages it, right? You'll largely not see different prices for things based on. Different payment methods. Occasionally you'll see merchants that don't want to accept certain kinds of credit cards. It's actually not that uncommon to see in the US small mom and pop shops say, we're not gonna take an Amex platinum.
They'll even like call out specific kinds of cards. 'cause they charge higher inter 'cause they, they charge higher interchange and that's how they pay for the benefits. Exactly. Right. Um, but that's, that's much more the exception than the rule. The rule generally that, that Visa pushes hard to enforce is if you're gonna take Visa, you're gonna take Visa, or if you're gonna take MasterCard similarly, and as a merchant, you, you kind of have to make a choice, all or nothing.
Yeah. And you expect the interchange framework to,
Will:
Is that likely to remain as it is going forward?
Ryan:
For the near term, absolutely. There’s been some political discussion in the U.S. about rolling back certain regulations that were introduced after the 2008 financial crisis — including the interchange cap.
Will:
That cap was essentially a penalty for the big banks?
Ryan:
Pretty much, yes. It was part of the Dodd-Frank Act, passed in 2010 as a direct response to the 2008 meltdown. It included a range of reforms, many designed to prevent another crisis. But this particular provision — the interchange cap — was sort of tucked in there. It was driven by a populist sentiment: the idea that the big banks were making too much money and gambling with Americans’ deposits. It came during the whole “too big to fail,” “Main Street vs. Wall Street” moment.
So, the cap said, "Let’s limit how much interchange big banks can earn."
Will:
And that cap applied to debit?
Ryan:
Exactly. And the irony is that while it was designed to hurt the big banks, it ended up doubling the cost of banking for average Americans. Free checking essentially disappeared for the middle class. That’s unfortunate for the country — but it created the opportunity for Chime to step in.
Will:
One thing we talk a lot about on the podcast is the evolving competitive landscape in digital banking. That includes players like Robinhood and FreeTrade in the UK — the free stock trading apps — as well as Betterment, Wealthfront, and other robo-advisors. Then there are companies like Monzo and Chime, which offer a transaction account and a card.
The general expectation is that everyone is evolving toward the same end state: a fully rebundled, comprehensive financial platform. They just started from different places — some began with investing, others with a checking account — but the goal is the same: build a broad product suite that supports long-term customer relationships and strong economics.
I’d love to hear your perspective on that. Is there a better starting point than others? And how do you see that dynamic playing out over time?
Ryan:
Yeah, it’s certainly a really interesting time to be in consumer fintech. We like to joke that pretty much every consumer fintech company has the same five-year product roadmap — it's just a question of which product they started with. But ultimately, we’re all trying to get to the same place: a rebundled bank, to use the buzzword.
Your question was about entry points — wedges into the market — and how that plays out. I think there are a lot of really interesting fintechs growing quickly. You mentioned free stock trading — Robinhood is a great example. They’ve achieved incredible traction with customers.
Traditionally, the bank playbook has been the same for over a hundred years: start by capturing the primary financial relationship and expand from there. What’s different now is that we’re seeing fintechs take a real shot at building from the opposite direction — starting with lending products, investing platforms, or even savings accounts, like Marcus, and then trying to expand from that wedge.
One of the things we think a lot about is engagement. From our perspective, the best wedge — and obviously the one we’ve chosen — is the one that starts with capturing the primary relationship. If you can do that and take good care of your customers in a way that’s aligned with their best interests — with a business model that doesn’t rely on fees or misaligned incentives — then you’re in a great position to follow the traditional bank playbook in a digital-native way.
When someone is ready to start saving or open a savings account, they’ll turn to you. When they’re ready to take out a loan or refinance debt, they’ll already trust you. But the hardest thing in financial services is getting someone to switch their primary financial relationship — so we decided to tackle that challenge head-on, right from the start.
There aren’t many examples in the U.S. — and I’m not sure about the rest of the world — of companies successfully starting without that primary account and then moving upstream. Maybe Charles Schwab is an exception here in the U.S.
So yeah, I think there’s a lot of excitement around the growth we’re seeing in consumer fintech. And time and time again, we’re seeing that lowering costs or making things free is a huge driver of that growth. Robinhood shows that. To some extent, Chime does too.
Will:
Maybe a related question — what’s your take on the prospects of some of the European digital banks like Monzo, N26, and Revolut as they look to expand into the U.S.?
Ryan:
Yeah, they’re all coming here — that’s what they’ve said, and I’m sure they’ll launch soon. We think they’re all great companies. They have similar missions, and they’re clearly technology-focused, which is great. It’s going to be interesting to watch, and increased competition will definitely benefit consumers.
The way we look at the competitive landscape — and specifically the entry of the European challengers into the U.S. — is that, at least in the short term, we’re all still taking customers from the incumbents. I wake up every morning thinking about how to switch more people from Wells Fargo to Chime.
As I said earlier, there are 160 million Americans living paycheck to paycheck. I don’t believe that financial services will be a winner-takes-all market in the same way that, say, Facebook took most of the market in personal social networking. I think there will be room for a number of strong, technology-first companies to enter the space and capture meaningful share.
In some ways, the awareness these players bring to the category — that there is an alternative to the bank branch on the corner — is a good thing. And as the leader in U.S. challenger banking, we think their arrival will create a “rising tide lifts all boats” dynamic when N26, Monzo, and others officially launch here.
Will:
And in terms of what some of the incumbents are doing right now—you mentioned Marcus briefly earlier. There’s also Finn by JPMorgan, a kind of digital banking proposition. What do you make of those efforts?
Ryan:
Different opinions on each. I think Marcus is really interesting. It’s backed by Goldman Sachs, and they’re clearly targeting the high end of the market. I think it’s a great product for that segment, and they’ll likely continue to focus there and do well. If they’re going after the top 5 or 10%, and Chime is going after the other 90%, we don’t really see it as directly competitive.
That said, it’s encouraging to see that level of speed in product innovation and execution from an established financial services company. That’s been great to watch.
When it comes to something like Finn, we’ve been more surprised—unfortunately, in a negative way. It’s surprising that a brand like Chase, which is one of the most valuable brands and companies in the world, would feel the need to launch something entirely new under a different name. That suggests either they think their core brand doesn’t resonate with younger Americans, or they’re not fully committed to it.
I know, for example, that it wasn’t built in-house, which also says something. The strategy of creating a sub-brand to target millennials—with images of people dancing at Coachella and emojis everywhere—feels a bit surface-level. If you think that’s all it takes to reinvent yourself, I’d say it’s not a very strong strategy.
Will:
I have to ask — the Apple Card announcement recently caught some people by surprise. I can imagine bankers quivering at the idea of big tech finally entering financial services. The narrative now seems to be that this is the first of many similar moves — banking as we know it will slowly be absorbed by the likes of Apple, Google, Facebook, and Amazon.
Is that your sense? Because, in some ways, you could argue it’s similar to what Chime is doing — there’s a digital interface and a connected card. But it sounds like there are some important differences.
Ryan:
Yeah, I think the Apple Card credit product is going to be great when it launches — I’ll definitely sign up for one myself.
And yes, I absolutely believe in the premise that software is going to eat the world — especially in financial services. That’s why I spend all my waking hours building at Chime.
That said, the Apple Card is a high-end credit card product backed by Goldman Sachs. It’s targeting the premium segment — it competes with cards like the Chase Sapphire Reserve or the Amex Platinum. I think it’ll be a killer product in that space, especially since it’s technology-enabled, not just a piece of plastic or metal. The user experience will likely be seamless — and very “Apple.”
But we don’t see it as directly competitive with what we’re building at Chime.
About half of our customers don’t have a credit card and don’t want one. They live paycheck to paycheck. For many of them, a credit card represents risk — the risk of falling into debt. There’s been a noticeable shift, especially among younger Americans, away from credit cards.
So for a lot of Americans, they probably won’t even qualify for the Apple Card. It’s backed by Goldman Sachs, after all.
It’s great that Apple is trying to reduce fees with the product, but it still has a 15% to 25% APR. If you’re high income, able to manage spending well, and pay your balance in full every month — then it’ll be an excellent product.
But if you’re an average American living paycheck to paycheck, you probably won’t qualify — and if you do, it may not be the right product for your needs.
Will:
What should people expect from Chime going forward?
Ryan:
Back to what I said at the beginning — our mission is financial health. We break that down into four key areas: spending, saving, borrowing, and investing. You can expect us to launch more products across all of those categories, especially in areas we haven’t addressed yet.
In the area of lending, credit, and borrowing specifically, we see a lot of problems with how the credit scoring system works in the U.S. — especially for younger generations. Many people are intentionally avoiding credit cards because they’re afraid of falling into debt. But that creates a vicious cycle: if you don’t use credit cards, you don’t build a credit profile, and then you can’t access mainstream lending products. And that can be really damaging to someone’s financial health.
So in the short term, we're focused on helping people improve their credit scores — finding responsible ways to demonstrate who is creditworthy.
For example, we recently acquired a startup called Pinch, which helps millennials build credit by paying their rent. That’s exactly the kind of solution we’re excited about — helping people build credit responsibly, without encouraging debt.
And over time, we’ll look for ways to responsibly extend credit to customers who need it.
Will:
Excellent. Ryan King, thank you very much for joining us today.
