Built for our members: Doubled SpotMe limits
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC
On a regular bank account, when you overdraw — spend beyond the amount of money in your account — you’re charged $32. In fact, in 2019, over $11 billion in overdraft fees was collected by big banks.
Living paycheck to paycheck — and the cost of overdraft fees
“While we offer our members access to their paycheck up to 2 days early^ when they set up direct deposit, the reality is that when you’re living paycheck to paycheck, needs come up before you get paid,” explains Dennis Jiang, a Product Manager on the Spending and Savings team. “That leads people to rely on payday loans, loans from friends and family, or simply going without.”
In the spirit of being member-obsessed — one of our company values — we started to think about how to help our members get by when their accounts run low. “We arrived at fee-free* overdraft — getting rid of the average $32 fee that is charged for an overdraft*,” explains Dennis. “After all, if someone is already out of money, why would you charge them a fee? It just didn’t make sense to us.”
The result was SpotMeⓇ*, an offering that allows Chime members to take their account into the negative without paying fees.* When their paycheck is deposited into their account, the amount overdrawn gets paid back to Chime — just like if you spot a friend and they pay you back.
Since launching SpotMe®* over two years ago — when Chime was about 85 employees — the team has learned a ton about what members want and need, as well as how to make SpotMe®* a great contributor to the business. “The maximum amount a member could spend on SpotMe® was previously $100,” Dennis explains. “But we were constantly getting feedback that access to a bit more cash — or simply the peace of mind that some more money was available — would make a huge difference.”
So the team did a lot of research, analyzed the risk, and decided to increase SpotMe®* limits to $200.
The economics and risk
“The offer of $200 fee-free overdraft is very much an inherently risky feature,” Dennis explains. “We were definitely apprehensive at first.”
But at Chime, we’ve invested a lot in being thoughtful about how we take risks so that we’re able to offer our products in a way that maximizes value to members and still controls our risk. For SpotMe®*, that means limiting availability based on a member’s activity and tenure with Chime and constantly evolving our models in order to determine the best ways to serve our members what they need while protecting our bottom line.
“We knew how risky increasing SpotMe®* limits could be, but we believe in our members and have been pleasantly surprised by how sustainable the product is since its launch,” Dennis says. To protect Chime’s bottom line while streamlining the experience for members, SpotMe requires that direct deposit be set up and accepts tips from members who would like to say ‘thank you’ for overdrawing their accounts.
The product process
The core member experience: To execute the launch of Doubled SpotMe® limits, Dennis and the team started with the core member experience. “We wanted to answer how this change would feel for members,” he says. “When a member gets the message letting them know their limit has been doubled — which we did for every member with SpotMe® on launch day — what kind of an experience do we want them to have?” Answering that question involved working across design, engineering, marketing, and many other teams to orchestrate a delightful launch experience that lets people know something big happened that day.
Evaluating risk: Of course, Dennis and the team also partnered closely with the risk team. “We wanted a sense of what might happen with newly doubled limits — it was uncharted territory for us,” he explains. With the help of the analytics, risk, and finance teams, they came to the best assessment of risk and revenue potential to maximize the feature for members and Chime alike.
Looping in our partners: They also had to collaborate with Chime’s bank partners (Chime isn’t a bank, we partner with banks to provide our products and services to members). “It was imperative that our banking partners be aware and comfortable with what we were launching,” says Dennis.
Getting ready for liftoff: A huge part of any launch is the marketing and communications around it, which was completely true for doubling SpotMe® limits. “We wanted to make sure members knew it was happening and that Chime was telling our story through this launch,” Dennis says. “We wanted to use the launch as a celebration of what we’re doing at Chime — of our mission and commitment to members. After all, $200 is a lot of money for Chime, for our current members, and for our prospective members!”
Everyone came together to make the launch happen so that now, every SpotMe® member has double their original limit and for up to $200 in fee-free* overdraft.
The launch — and measuring its success
“There are a lot of moving pieces required to make something like this happen,” explains Dennis. “We were really excited and the launch went very well overall.”
Members were really excited, too. In fact, they flooded the app and the launch team had to slow communications to members about the launch to keep the app stable. “When the dust settled from the overwhelming excitement, it was a tremendously uplifting day,” Dennis says. “Millions of Americans got access to higher overdraft limits. They also showed Chime a whole lot of love on social, which was very rewarding.”
When it comes to measuring the success of the launch, Dennis and his team looked at how members reacted. “A lot of people actually came back to the app after our launch to take advantage of the new feature — that showed us that the message was far more compelling with the higher limit,” he says. They also looked at the financials of Chime as a business, monitoring the costs of the new limits, tips received, money outstanding, and repayment rates.
“All in all, when we look back at the launch, we’re reminded of our commitment to our members. SpotMe® has been a tangible and relevant way to help members and, in fact, became our number one cited feature in our recent #WhyIChime campaign. It works for members, which means we’re delivering on our promise,” Dennis says.
This page is for informational purposes only. Chime does not provide financial, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal, or accounting advice. You should consult your own financial, legal, and accounting advisors before engaging in any transaction.”
Banking services provided by The Bancorp Bank or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Chime Visa® Credit Builder Card is issued by Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see back of your Card for its issuing bank.
*$32 average overdraft fee from 2012 to 2020 based on Bankrate Checking Account Fee Study.
*Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Spending Account each month. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Friends transfers, or Chime Checkbook transactions. See Terms and Conditions.
By clicking on some of the links above, you will leave the Chime website and be directed to a third party website. The privacy practices of those third parties may differ from those of Chime. We recommend you review the privacy statements of those third-party websites, as Chime is not responsible for those third parties’ privacy or security practices.
Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank and Stride Bank N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).
