A new credit product that functions like a debit card was launched in America recently. An American financial services provider, Chime, introduced a product called Credit Builder.
Known as a challenger bank in the US, Chime has been on the radar of offering financial services with less to zero fees targeting younger demographics, such as Millenials. It also does not charge overdraft fees
It has kept up with the digital age by providing some value-added services to increase brand equity in the market. Such a vast range from premises like faster money transactions vs fiat-backed traditional financial firms.
Consumers are being issued Visa debit cards which can also be extended to using an online banking system through chime.com or a mobile app available in Android or iOS.
Moreover, it has given authorization by the Bankcorp Bank who is a member of the US Federal Deposit Insurance Corporation.
Founded in 2013, Chime is poised to become an option to traditional banking. This company pulls its majority of profit from interchanges revenues.
By definition, Interchange is the fee that banks ask the merchant who to shoulder the costs to proceed with the transactions. If one would base on this model., the success rate of earning is relying on rewarding customers to make card transactions as often as possible.
This is another icing to the cake endowed by Chime to its customers.
Some weeks ago a pilot program was initiated amid COVID 19 scare. This is described as allowing users incentives especially to those who submitted online tax returns. To qualify, one must have IRS with $1,200 advance on the Economic Stimulus Payment via SpotMe.
Before the product launch, Chime has been reported to beta test for almost a year until it has augmented enrollees to 20,000. Among the highlights in that trial is helping 95% of members with no credit history create a credit score for the first time.
With this, Chime has become one of the most active product developers who is proactive and takes into account some insight from consumers to develop an innovative function.
Major these campaign insights were reliant on a study it garnered in 2015 where 67% of millennials preferred debit cards.
From this, they used data to integrate credit score building and consumer needs. Thus, consumers can smoothly transfer money from accounts where the Visa card is also accepted.
With the launch of the card, expectations mount for great adoption of the Credit Builder Card which in ways imaginable will help boost the company’s customer base which hit 8 million in February 2020 and its valuation which currently stands at $5.8 billion as of 2019.