Chime’s $590m purchase of Stride Bank looks to be more about control over infrastructure than owning a national charter.
Chime has announced plans to buy banking partner Stride Bank for $590m, taking control of its customer accounts and payments infrastructure.
The acquisition, subject to regulatory approval and expected to close in the first half of 2027, will see Stride Bank become Chime Bank, operating as a wholly-owned subsidiary of the US-based fintech.
Chime will join a recent trend of fintech companies becoming nationally chartered banks, removing some of its reliance on external partners for regulated banking infrastructure after working with Stride for seven years.
Chris Britt, CEO and Co-Founder of Chime, stressed that the acquisition would strengthen the company’s existing strategy. The fintech currently serves over 10 million members, a figure it puts down to its payments-led model.
“Our member-aligned, technology-driven strategy will remain the same. This acquisition will make our proven model even stronger,” Britt said.
“By combining Chime’s leading brand and deep member relationships with Stride’s national charter and team, we will accelerate toward our vision to be the largest provider of primary bank accounts in America.”
Bringing the banking layer closer
Established in 2012 by Britt and Ryan King, the US-based fintech’s main goal was to disrupt traditional banking by offering fee-free checking and debit cards. Over the last decade, it has become the largest digital bank in the US.
The fintech has used partnerships with banks throughout its history that provide the regulated infrastructure sitting behind its consumer-facing products. However, buying Stride changes the relationship by giving Chime ownership of the charter, banking operations and compliance capabilities of one of those partners.
According to the company, the acquisition of Stride should allow for reduced handoffs between its technology and the regulated banking layer, as well as bring data and decision-making closer together.
Chime believes this will allow it to develop compliant financial products faster, especially as it ramps up the use of AI across its technology stack.
Stride will initially support Chime’s consumer business following the completed acquisition, with the fintech planning to consolidate more of its banking activity at the bank.
“For seven years, we have seen firsthand how Chime puts members first and how seriously it takes its mission,” said Brud Baker, Chairman and CEO of Stride Bank. “Stride’s national bank charter and experienced team will be central to what comes next.”
The financial case for Chime
Chime expects more than $100m in net synergies from the acquisition, partly from the removal of sponsor bank fees and a lower cost of funding. Owning the bank should also give it more control over the economics of its consumer accounts and payments activity.
The company said the transaction will boost earnings per share immediately once completed and will be funded using existing cash on its balance sheet.
Chime plans to keep the combined bank below $10bn in assets for the foreseeable future, suggesting that it doesn’t intend to turn into a traditional balance sheet heavy bank. It says the model will stay payments-led and asset-light.
It appears that the deal is mostly about owning more of the regulated banking infrastructure for Chime. Sitting alongside its existing model, this could provide the fintech with flexibility as it crosses into other areas, such as lending and other payment products.
In August, it was reported that the company was looking to add stablecoins to its consumer app, although the fintech hasn’t mentioned those plans in the Stride announcement.
If the plans go ahead, customers could potentially hold, send and receive stablecoins through the same app they use to manage their everyday finances.
