Digital Bank Chime to Test Out New Way to Instantly Send $1,200 in Federal Stimulus Payments to US Customers, Following COVID-19 Outbreak

Chime, one of the largest US-based digital banking startups, is testing out a new way for its customers to instantly receive their $1,200 in federal stimulus checks. The neobank’s clients would be able to receive their cheques weeks before the American government plans to begin sending out payments to US citizens impacted by the global Coronavirus (COVID-19) outbreak.

The San Francisco-headquartered virtual bank noted that it randomly selected 1,000 of its clients to get the payments on April 2, 2020. The company says it used a feature called SpotMe that usually lets members go negative on their account balances without having to pay extra charges.

Chime CEO Chris Britt told CNBC:

“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.”

Chime is using its own funds to provide the money to its customers, until the US government settles those payments, which are notably part of the historic $2 trillion COVID-19 relief package that was recently signed into law.

Britt said that if he’s able to get reassurance from the American government that the digital bank’s clients aren’t able to transfer stimulus payments to other accounts, then the company will consider offering the early payouts to Chime’s 8 million+ customers.

The number of US residents who’ve submitted applications to receive unemployment benefits increased by 10 million in just the past couple weeks. This may be attributed to many shutdowns as the US tries to slow down the further spread of the highly contagious coronavirus.

Users who’ll get the payments will probably be those customers who direct-deposit paychecks into their Chime bank accounts and have received federal tax refunds.

Chime recently managed to increase its valuation by 4x to roughly $5.8 billion as the neobank rapidly expanded its customer base.

Chime has been in talks with US Treasury department officials about providing free accounts to individuals who might not have access to checking services, so that they’re able to  get stimulus payments, Britt confirmed.

Earlier this month, Chime filed an amended Form D with the US Securities and Exchange Commission (SEC) in which it noted that its most recent funding round has moved a touch higher. According to the filing, Chime has now secured $700 million in capital from 25 investors. The date of the first sale was November 20, 2019.

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