The neobank’s public filing is a win for underserved-centric banking, but delivering true financial resilience for all Americans will require deeper innovation and a broader business model.
If you are in the fintech world, you already know that Chime filed its S-1 last week, aiming to go public on the NASDAQ under the ticker “CHYM” sometime later this year. With over 8.6M “active” users, $1.67B in 2024 revenue, and a valuation expected to exceed $20B (though educated estimates vary), Chime’s IPO is a major event for the fintech industry. But for ResilienceVC and other investors focused on supporting fintech innovation for the underserved, this is a watershed moment, an industry-defining proving ground for the ability to build a real, scalable, and ultimately profitable American fintech company that focuses on the core needs of the un- and underbanked. But there is much more to do.
“CHYM” proves inclusive fintech can work
Chime confirms that a neobank with no branches, no monthly fees, and a product-led growth model can reach profitable escape velocity. Chime built its business on reducing financial harm and doing right by its customers. Its core banking product eliminated overdraft fees, avoided harmful monthly charges and steered clear of predatory lending. That’s a shift from how many Americans have experienced traditional banking, especially those that are financially unstable and lack the capital they need to get through the week or month. And some of the early evidence on growth and profitability is promising, though it has taken time to get there. In a space that has had its fair share of challenges, Chime has stayed disciplined and grown sustainably with solid unit economics.
This model, ultimately fueled by deep consumer trust, clean user design, and a pure focus on the underserved, also marks the end of digital banking for inclusion as an experiment in the United States. Arjan from Core Innovation Capital says that “while Chime’s business model is not new, what makes them stand out is a flywheel stemming from consumer-obsessed products and an aspirational brand.”
A business based on swipes (for now)
Beneath the celebration, however, is a business model still anchored on the basic interchange fee. Roughly 80% of Chime’s revenue comes from card swipes — merchant fees collected every time a customer uses their debit card. It’s real revenue, but it’s also fragile, as is its intrinsic growth. It is reliant on ever-rising spending behavior, and vulnerable to regulatory sentiment and any potential shifts in the Durbin Amendment. Even if 67% of active users use Chime as their primary financial provider, loyalty shifts, and there is always risk of customer flight.
The company’s flagship non-interchange features, like SpotMe (for fee-free overdrafts), Credit Builder (a secured card for building credit), and MyPay (early wage access), generate additional revenue and are more directly tied with consumers’ ultimate financial needs. But their ability to deepen revenue is not yet proven. Chime’s impact case, and its valuation case, are still tied to interchange and a benign checking account.
Harm reduction is not the same as building resilience
Financially unstable Americans ultimately need more than a gentler checking account. They need tools to manage short-term volatility and liquidity and ultimately to build long term wealth. That means tackling the next level of financial services challenges: income smoothing, rising home costs, growing childcare expenses and stable incomes for retirement. Chime helped millions get the starter set of financial products. But to help them truly thrive and build through inevitable uncertainty, it needs to go further – by expanding its core services and working with new fintechs on additional products that can drive real resilience.
This next generation of fintechs go beyond avoiding fees. They build on trust and basic banking services as table stakes, but then focus on tangible progress toward resilience: authentic credit score improvements, lower volatility, debt reduction and growing net worth. Neobank 2.0 will be built on financial resilience.
This includes innovators like Piere and Robora that are automating financially healthy behaviors, and companies that are helping everyday Americans “find money” like Mirza, Coral, or Starlight. This new generation also includes solutions like Parento, Chaiz, Flora, or District Cover that improve access to risk mitigation tools for massive underserved markets. While every innovative fintech founder will have a different approach, the revenue and value necessity of financial resilience is consistent.
Chime’s IPO is indeed a generational milestone for inclusive consumer fintech. It proves that a mission to serve the underserved, if executed with discipline and scale, can deliver returns for both users and investors. But big market moves are also opportunities to learn and begin the innovation cycle anew. This moment should be celebrated, but it should also be used to ask harder questions. Not just “how big and valuable can neobanks get?” but “how deep can they go in building real value for their customers?”
Chime showed us what’s possible. The customer is still looking for what’s necessary.
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