Chime and Current made select clients’ stimulus payments available to them on December 29

• Chime and Current made the latest round of stimulus payments available early to some customers.
• This is a move that may drive both customer acquisition and retention at little extra cost.
• Insider Intelligence publishes hundreds of research reports, charts, and forecasts on the Banking industry with the Banking Briefing. You can learn more about subscribing here.

The two US neobanks used their balance sheets to make select clients’ stimulus payments available to them on December 29—the day the federal government started sending payments to banks, meaning that those customers got their payments before clients of established incumbent banks, The Wall Street Journal reports.

Insider Intelligence

Current had credited accounts for tens of millions of dollars in payments by December 30, per founder and CEO Stuart Sopp. Meanwhile, a Chime spokeswoman said that by early December 31, that the neobank had made $700 million in stimulus payments available to more than 700,000 of its customers.

For Chime, this early access is a bold expansion of a pilot the neobank ran in April, during the first round of stimulus checks. Shortly before the government began sending out $1,200 checks, Chime selected 1,000 customers who received their payments instantly through its SpotMe feature, which usually acts as an overdraft protection feature, allowing customers to go negative in their accounts without having to pay an overdraft fee.

The neobank later modified and expanded the pilot, offering $200 cash advances to 100,000 customers. That Chime is now taking a more aggressive line—providing the latest $600 stimulus check to a much larger number of clients—suggests that its April pilot was a success.

Providing early access to stimulus funds is a reputation-boosting move for neobanks, and could be a potent customer retention and acquisition tool. The initiative got much-needed and long-delayed financial relief to Chime’s and Current’s customers as quickly as possible.

That could spark goodwill among current users and the general public, generating positive word of mouth for the neobanks without cutting into their marketing budgets. Early stimulus check access could also spur more customers to set up direct deposit with the neobanks, especially if they position their similar early wage access feature alongside the stimulus funds perk. This can turn customers into stickier, more valuable users in the longer term.

As a final added benefit, stimulus advances could also help bolster Chime’s and Current’s relationships with the federal government, which expects all banks to help ease the pandemic’s economic burden on consumers—and may be impressed to see neobanks stepping up too.

Want to read more stories like this one? Here’s how you can gain access:

1. Join other Insider Intelligence clients who receive this Briefing, along with other Banking forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
2. Explore related topics more in depth. >> Browse Our Coverage

Current subscribers can access the entire Insider Intelligence content archive here.