Chime to buy longtime partner Stride Bank for $590 million

Chime is moving from a fintech app to a full-fledged bank by acquiring its partner, Stride Bank. For retailers and merchants, this signals a massive shift in how consumer liquidity and 'neobank' financing will work. By owning the charter, Chime can now issue credit products and consumer loans directly. They won't have to wait for third-party approvals or pay middleman fees. This likely means faster innovation in their 'MyPower' credit-builder tools and potentially new point-of-sale financing options for their 20 million users. For your business, this means the 'Chime user'—often a younger or credit-builder demographic—will soon have access to more robust spending power. Chime’s lower cost of funds allows them to offer more competitive rates or looser approval hurdles than fintechs that rely on partner banks. As the line between banking and lending blurs, expect Chime to become a more aggressive player in the consumer credit space, competing directly with traditional credit cards and BNPL providers at the checkout counter.

Source: American Banker — Top News

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