Q2, Chime Use Digital Subscription Services to Drive FI Revenue With CardSwap

EXCLUSIVE- Q2 Holdings and Chime are taking advantage of how users typically pay services like Amazon or Netflix to help drive more interchange revenue to financial institutions.

For consumers, paying digital subscription services like Netflix typically involves a degree of laziness. Most customers set up payment for these services once, and never look again unless there’s a problem… such as changing one’s bank, for instance. That’s where Q2’s CardSwap product comes in.

The product is being rolled out first with Chime, a branchless online bank account that is experiencing rapid growth: the bank currently has about 500k customers, it said at Finovate on Tuesday.  

“When [Chime] has new customers that are onboarded, the statistics say that how good they are as a customer depends very much on how well they get onboarded in the first 60, 30 days,” Jordan Wright, director for Q2 Open, told Bank Innovation.

That includes points like how quickly one receives and begins using a new bank card, according to Wright. At Chime, a new customer will receive a new bank card before receiving a push or other notification from the bank, inviting them to switch the card over as the payment method for Netflix or Amazon-like services. Being “top-of-wallet” among their customers is a constant precoccupation for banks.

Essentially, CardSwap allows users to “switch” their new debit or credit information into these kinds of services or subscriptions, removing a point of friction that may be keeping customer from switching to a more modern, more innovative bank.

This is especially true for millennial consumers, who are early adopters of Netflix-like services and tend to want more mobile or technology-heavy support from their banks. On the bank’s end, this means opening the doors to interchange revenues it may not have had access to from these consumers.

“Our mission to try and help people lead healthy financial lives, which is an especially acute problem for millennials, because there’s a lot more income variability, a lot more expense variability; everyone is living paycheck to paycheck,” Ryan King, co-founder and CTO of Chime, told Bank Innovation. “We think the solution is automation of financial health.”

3 - Readers Like This Post

Leave a Reply