- Challenger bank Chime added 10,000 new bank accounts over the past 24 hours following an outage at Wells Fargo that left some customers unable to use their debit cards or access their online accounts.
- Chime is also close to raising $300 million at a $1.5 billion valuation, according to Bloomberg.
The recent outage at Wells Fargo which left some customers unable to use their debit cards may have infuriated its customers, but it was good news for some upstart banks.
Chime, a pure-play digital bank, opened nearly 10,000 new bank accounts over the past 24 hours which was a company record, according to to Chime’s co-founder and CEO Chris Britt.
Britt didn’t single out Wells specifically, but said many of these new customers were frustrated with their experience at big Main Street banks.
"We definitely saw a huge uptick in consumers reaching out to us on Twitter and other social media channels, with the general sense that a lot of them were just at the end of their rope," he said. "People either singing our praises or asking questions about [Chime]. We even had some dialogue like, ‘Hey, should I switch to you guys? Why should I switch to you guys?’"
Chime, founded in 2013, offers its customers a fee-less checking account, which is rare among US banks. The biggest US banks each make around $1 billion a year in fee-related revenue.
With the dramatic rise in new customers, Britt estimates the Chime’s total bank accounts will hit 3 million by the end of February. Chime’s monthly transaction volume tops $1 billion.
The company is also close to raising $300 million at a $1.5 billion valuation, according to Bloomberg.
Wells Fargo experienced a large-scale outage on Thursday after smoke was detected at one of the bank’s main data center facilities. The outage continued into Friday, the company said, though some of its ATM services have been restored and branches are operational.
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Source: Business Insider