Chime Pulls in $18 Million, Surpasses 500,000 Bank Accounts

Chime, a mobile banking challenger that says it helps customers avoid fees and automate their finances, has raised $18 million in Series B financing, led by global venture fund Cathay Innovation.

The company, co-founded by prepaid veteran Chris Britt, also reported that more than 500,000 bank accounts have been opened since the company’s 2014 launch.

Cathay Innovation led the round from its $320 million venture fund and offers a global investment network bridging North America, Europe and China. Other new investors in the round include Northwestern Mutual Future Ventures and Omidyar Network, which invested through their Financial Inclusion initiative. Existing investors Crosslink Capital, Aspect Ventures, Forerunner Ventures and Homebrew also participated in the round bringing Chime’s total funding to $36 million.

“Look at any of the headlines these days and it’s clear that traditional U.S. banks continue to fail millions of Americans with adversarial practices and opaque fee structures,” says Britt. “This financing allows us to rapidly scale a new approach to mobile banking that actually improves financial lives.”

Chime, which offers its banking services through a partnership with The Bancorp Bank, says members who enrolled in Chime’s automatic savings program have tripled their average monthly savings.

In addition to investing in growth, the company will use this latest round of funding to launch new features to help members further automate their finances. Chime also will introduce new services through its open APIs and partnerships with financial companies to enable the Chime account to serve as a connected hub for customers to manage all of their financial accounts.

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Whole Foods Market Reports Breach

On Sept. 28, Whole Foods Market announced it had recently received information regarding unauthorized access of payment card data used at certain venues such as taprooms and table-service restaurants located within some of its stores.

The venues use a different point-of-sale system than the company’s primary store checkout systems, and payment cards used at the primary store checkout systems were not affected, the retailer says.

Whole Foods has launched an investigation, hired a cybersecurity forensics firm, contacted law enforcement and is taking “appropriate measures” to address the issue.

The grocery chain, which was acquired by Amazon in August, didn’t specify how many cardholders might be affected by the breach. However, it noted that most of its locations don’t have taprooms or restaurants. Still, it’s encouraging customers to monitor payment card statements and report any unauthorized charges to their issuing banks.

Transactions on Amazon.com, which are processed separately, have not been impacted, according to Whole Foods.

The number of U.S. data breaches tracked through June 30, 2017, hit a six-month record high of 791, according to recent data released by the Identity Theft Resource Center and CyberScout. This represents a 29 percent jump over 2016 figures during the same time period.

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Image Credits: wk1003mike

CFPB Financial Well-Being Report Underscores Industry Opportunity

Earlier this week, the CFPB released its first national survey on the financial well-being of U.S. consumers and a tool to help consumers see how they stack up. More than 40 percent of U.S. adults struggle to make ends meet, according to the survey.

The survey created financial well-being scores (1-100) for respondents based on a 10-question scale. The average consumer score was 54. What’s more, 34 percent of all consumers surveyed reported experiencing material hardships in the past year. Examples of material hardships include running out of food, not being able to afford a place to live, or lacking the money to seek medical treatment.

That’s not really surprising given other recent research, according to the Network Branded Prepaid Card Association’s Chief Operating Officer Ben Jackson. But, he says, it does present an opportunity for the financial services industry, including prepaid providers.

“The fundamental takeaway from this report—and it’s easy to forget if you haven’t lived that kind of life, or haven’t lived it in a long time, is how difficult it can be,” Jackson says of living paycheck to paycheck or with volatile income. “Thinking about what kinds of needs your customers may have and paying attention to where you might be able to help them is a big opportunity in a lot of ways,” he says pointing to credit, savings and budgeting tools.

Education, income and employment status all appear to have a strong relationship with financial well-being, the CFPB notes. The survey also showed that financial well-being is higher for older adults, especially those age 65 and older, whose average score was 61. Younger adults, those 34 and younger, tended to have the lowest financial well-being score with an average of 51.

“There’s no problem that can’t be solved,” Jackson adds. “It’s just that getting the right products to the right people when they need them can be a challenge. Some of it is a marketing or distribution challenge, but some of it is a regulatory challenge. … The technology and tools exist, but the regulation or the business case doesn’t always allow for it. Still, there’s an opportunity for the industry to figure out ways to deliver more value to customers.”

CPI Names Scott Scheirman CEO

CPI Card Group, a provider of financial card production and related services, announced the appointment of Scott Scheirman as president and CEO, effective Oct. 5, 2017. He succeeds Steve Montross, who is retiring from the company but will continue in an advisory capacity through June 30, 2018.

Scheirman has served on CPI’s board since October 2016 and will continue to do so. He brings more than 20 years of executive global business leadership experience with organizations including First Data Corp. and Western Union.

Scheirman served as executive vice president and chief financial officer of Western Union for seven years, where he helped expand revenue from technology-enabled B2B and consumer digital product offerings more than six-fold in five years and had broad global executive responsibilities, including leading business planning and analysis, financial operations and process improvement, according to an announcement.

Prior to Western Union, Scheirman spent 12 years at First Data in a variety of executive leadership roles and prior to First Data, he spent seven years at Ernst & Young.

Pindrop Releases ‘Next-Gen’ Phoneprinting with Machine-Learning Might

Pindrop, an Atlanta-based voice security and authentication firm, has released Pindrop Protect 4.0, which includes its patented high-definition Phoneprinting technology that analyzes more than 1,300 features of a call’s audio to detect the subtle anomalies that indicate fraud, and determine the device type, geolocation and carrier.

Phoneprinting 2.0, coupled with accuracy enhancements in metadata analysis, delivers 10 times the clarity compared with its predecessor, Pindrop says. These upgrades enable Pindrop Protect to increase the detection rate of the “most sophisticated fraudsters by 20 percent.”

Call centers in the U.S. receive a fraudulent call every second, according to Pindrop Labs’ research. Fraud losses totaled $14 billion last year, and companies are spending an additional $8 billion annually on authenticating customers, the company says.

Pindrop’s technology is used in concert with machine learning and a customer consortium of shared fraudsters and anonymized fraud models that make it “highly accurate.”

“In the past few years we have seen fraud in the call center rise more than 200 percent and during this time we have seen the tactics fraudsters use becoming more sophisticated than ever before,” says Vijay Balasubramaniyan, CEO and co-founder of Pindrop. “Protect 4.0 combines six years of data, knowledge and insights to deliver a second generation hi-def phoneprint that will make it very difficult for bad actors to continue committing a faceless crime.”

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