All Access

Fintech Deals

Standard

Fintech Deals Thought Bubble

Thought Bubble

Fintech Deals Alerts

Alert

mustard

BFD Expert Voices - Private Credit

BFD Expert Voices

A line chart tracking Chime Financial stock price daily from Aug. 10 to Sept. 9, 2026. The low was $30.85 on Aug. 10. Prices mostly climbed through late August, dipped to $31.66 on Sept. 1, then recovered to $34.55, the period high, on Sept. 9.

Chime Financial stock price

Data: Financial Modeling Prep; Chart: George Moriarty/Axios

Chime's decision to buy longtime bank partner Stride came after it determined reliance on third parties had become a product development bottleneck, president Mark Troughton tells Axios.

Why it matters: The sponsor-bank model may no longer work for scaled fintechs.

Driving the news: Chime on Tuesday agreed to acquire Central Service Corp., the parent of Stride Bank, for $590 million in cash. If approved, Chime would own Stride's national bank charter, branches, technology and banking operations.

Shares rose 10% in premarket trading today and closed at $34.55. 

If the deal is approved, Chime would own Stride's national bank charter, branches, technology and banking operations.

State of play: Chime had depended on third parties for the regulated infrastructure behind its products, Troughton says.

Its proprietary software stack, ChimeCore, increased the company's product velocity but also exposed the bank-partner relationship as the next constraint.

"We're really insourcing the one part of our value chain" that Chime did not control, Troughton says.

The big picture: When Chime went public last June, Troughton told Axios that a charter wasn't in the company's near-term future. He also said Chime did not need to own a bank to offer better banking products.

But Chime's regular review of the sponsor-bank model shifted over the past year as the regulatory climate improved and its growing lending business made lower funding costs more valuable, Troughton says.

Reality check: Chime says it plans to keep its assets below $10 billion, preserving the Durbin small-issuer exemption and the higher debit-card interchange fees it allows.

Troughton says that target reflects Chime's asset-light strategy, rather than being principally about the Durbin rules. But he acknowledged advantages to staying below it.

Zoom out: Chime's deal comes as both Nu and Revolut pursue their own U.S. charters. 

Both have received conditional OCC approval to form de novo national banks but still need further approvals before opening.

Zoom in: Troughton says Chime's opportunity is winning primary banking relationships from the handful of big banks that still control 70% to 80% of them.

"Our competitive set is not NuBank or Revolut. Our competitive set is the big banks," Troughton says.

Between the lines: Chime considered pursuing a de novo charter, but Troughton says buying Stride was the faster path to owning the regulated infrastructure it already uses.

A de novo application would still require regulatory approval, plus the work of building a bank's systems and hiring its team from scratch.

Troughton estimates buying Stride will get Chime to market 12 to 18 months faster than starting a bank from scratch.

The intrigue: Chime has not said which of Stride's other sponsor-bank programs it would retain over time, even as Troughton says its consumer business will become the bank's primary priority.

What's next: The deal is expected to close in the first half of 2027, subject to regulatory approval, at which point Stride would become Chime Bank, N.A., a wholly owned subsidiary.

Chime buys Stride as sponsor-bank model hits limits

The sponsor-bank model might not work for scaled fintechs.

Chime&#x27;s decision to buy longtime bank partner Stride came after it determined reliance on third parties had become a product development bottleneck, president Mark Troughton tells Axios.Why it matters: The sponsor-bank model may no longer work for scaled fintechs.

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

transportation

business

c-suite

retail-news

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

charlotte

salt-lake-city

denver

fort-lauderdale

cincinnati

scottsdale

boulder

kansas-city

austin

chicago

dallas

detroit

atlanta

indianapolis

nashville

nw-arkansas

columbus

hollywood

washington-dc

north-of-cincy

mesa

richmond

san-francisco

boston

des-moines

houston

phoenix

miami

philadelphia

seattle

new-orleans

colorado-springs

huntsville

raleigh

san-antonio

twin-cities

pittsburgh

san-diego

tampa-bay

portland

cleveland

arapahoe

douglas

axios-local

axios-pro

axios-live

the-axios-show

Chime buys Stride as sponsor-bank model hits limits

What to read next