8.6 C
New York
Sunday, September 27, 2020
Home Challanger banks Chime pilots $1,200 instant stimulus in forward

Chime pilots $1,200 instant stimulus in forward

Chime, the biggest U.S. digital bank start-up, is piloting a way for its users to receive their federal $1,200 stimulus checks instantly.

This would come weeks before the government is expected to send the payments.  

Chime is a San Francisco-based company and they randomly picked 1,000 of its customers to get the payments Thursday using a feature called SpotMe. This usually allows members to go negative in their accounts without incurring fees. 

The thing is, the bank is using its own capital to front the money until the government makes those payments, part of the historic $2 trillion coronavirus relief package signed into law last week.

Read also: Starling Bank launches a “Connected card” to tackle COVID

It is taking on some risk, according to CEO Chris Britt. He wants reassurance from the government that Chime users can’t redirect stimulus payments to other bank accounts, he plans on expanding it to more of the bank’s 8 million users, he said. 

“We think the aggressive action taken by the government is awesome, and we applaud it, but consumers need faster access to that money to pay their bills,” Britt said in a telephone interview.

“The insight we got from our first [stimulus funds advance] pilot was that the vast majority of people did not want to access the full $1,200,” says Chris Britt, CEO of Chime.

“We’re putting real dollars on the line, without interest rates or guarantees. We’d love to give it to more people. If we had greater certainty that the payments will hit our accounts, we’d do it.”

The number of Americans filing for unemployment benefits surged by 10 million in the last two weeks.

That is an unprecedented event caused mostly by shutdowns as the country attempts to slow the spread of the coronavirus.

This will definitely cause widespread hardship, especially among people with little savings. 

The idea of the program came in discussions with entrepreneur Mark Cuban, owner of the Dallas Mavericks. Britt has become friendly with Cuban after the two agreed to a sponsorship deal.

Source: https://www.fintechfutures.com/2020/04/chime-pilots-instant-1200-stimulus-check-payments/https://www.cnbc.com/2020/04/02/chime-bank-pilots-way-to-get-1200-stimulus-checks-to-users-instantly.html

Avatar
Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

Recent posts

Yandex agrees to Tinkoff bank acquisition for $5.5bn

Yandex is Russia’s biggest tech company and now it is set to buy the challenger bank called Tinkoff for $5.5 billion.

TransferWise reports 70% revenue growth and a 4th straight year of profitability

Annual revenue at TransferWise grew to £302.6 million, the company. These results show a net profit after tax of £21.3 million for fiscal year ending March 2020.

“Mitto helps its users to save money while saving the planet,” says Marcos Cuevas, the company’s co-founder and CEO

Mitto is a Barcelona-based debit card/finance app and it is mainly a sustainability-focused product that has raised €2M from Athos Capital and others. Mitto has a live crowdfunding campaign on Crowdcube in which the company has already raised £500,000.

Allica Bank is launching a £100m funding round

Allica Bank has already closed a £26 million investment and now is launching a new £100 million funding round to meet the current high levels of demand for its services.