Sofi vs Chime and Digital Banks
Can someone explain if these new digital banks are really different and pros or cons for innovations they use. As far as I can tell SoFi isn’t really a bank and has a slick way to acquire users via their student loans. Perhaps this makes them have better margin overtime as they’re not using old infrastructure? Chime is a regulated bank and just seems like a better version of ‘Chase mobile’ perhaps? I read Branch is another late stage digital bank too. If one is better than the other can you share why? Fintech not my space so truly want to learn. Obviously, both are doing something right. Thanks!
SoFi money is technically a brokerage account. Look at the terms of the money sweep / partner banks it’s pretty interesting actually. The main limitation is your money isn’t FDIC insured for up to 2 business days.
Chime is not a bank, it’s technically a software company that partners with several banks that are FDIC insured. What makes Chime special from what I understand is that 1) they have an upstream relationship with their customers at the checking account direct deposit level 2) are able to provide free banking services, but make money on debit card interchange fees. So If Chime is your main bank and you use it to pay all your bills, it’s basically highly predictable high margin reoccurring revenue...
Oh wow, didn’t realize that. So basically they’re a ‘digital broker.’ I sign up for free services.