Up To 2 Days Early
I was the first product manager at Chime. We built a lot of features, but the one that mattered most to working Americans wasn't really a feature at all. It was a policy decision that took maybe a few lines of code.
The most influential thing we shipped at Chime was simply giving people their paycheck immediately. We called it "Get Paid Up to 2 Days Early."
I remember asking Ryan why we were doing it—trying to anticipate technical issues, pushback from the partner bank, legal concerns. His answer was "why not?" That question contained more insight than I realized at the time.
Today most banks advertise some version of early direct deposit. But before Chime, this didn't exist. And the reason it didn't exist wasn't technical. It was about how banks make money. Chime runs on interchange. When you swipe your card, the merchant pays Visa a fee, and Visa shares part of that with Chime. The incentive is simple: get people to use their Chime cards instead of the alternatives.
When your employer runs payroll, they're starting a multi-day process. HR creates a file, sends it to their bank, and that bank sends it through ACH—the creaky system that moves money between American banks—to your bank. The file says: here's the account, here's the amount, here's the settlement date.
But here's the thing: major employers don't bounce paychecks. When Chime got notified of an incoming deposit, we released the funds to the person's account immediately. The payroll deposit would dependably arrive at Chime within the next 2 days. Losing payroll direct deposit money to fraud is extremely unlikely. So: why not?
I excitedly told friends about this feature and got a predictable response: won't the pay cycle just shift? Why does it matter if I get paid Wednesday instead of Friday?
These people, like me, had never lacked the funds to buy food. They'd never risked losing their housing. They had credit cards—which are essentially time machines for pay periods, giving you a free 30-day loan before anything's due.
Without credit, timing is everything. If your electricity bill is due on the 25th and your paycheck hits on the 24th instead of the 26th, your lights stay on.
My peers couldn't see the value because they'd never needed it.
Legacy banks can't claim the same naiveté. Wells Fargo has been caught stealing from customers again and again—misapplied fees, fake accounts, creative financial crimes perpetrated against their own customers. They keep doing it because the penalties are smaller than the profits and arrive years later. Even when fined it ends up being a free multi-year loan for them.
Wells Fargo knows people need their paychecks immediately. They're not naive. Yet for decades they've held payroll deposits until the last possible second. Worse: they've charged their poorest customers overdraft fees between being notified of incoming deposits and actually releasing the funds, money they choose to take from their customers despite knowing the account was about to be credited. They take $35 from working people because they can.
For non-Americans: overdraft fees are how American banks extract $5+ billion a year from people who have no money.
At launch we didn't communicate the "up to" part well enough. That was probably my fault.
It's not always 2 days early. There are steps before Chime gets notified that we can't control. If HR runs payroll late, the deposit arrives late. Explaining this requires explaining the entire ACH system, and even then there are unpredictable failures in what's essentially a batch-processing system from the 1970s.
Because Chime offered early direct deposit, competitors had to match it. Now millions of Americans get their paychecks sooner. That's more leeway to manage bills, more breathing room to survive until next month.
This happened because Chime had a mission—"have our members' backs"—and a business model that didn't require squeezing customers. We were fewer than 30 people trying to build something sustainable without charging fees. People told us it couldn't work, that we'd need to build products for rich people to subsidize serving everyone else.
Chris and Ryan didn't listen. I'm proud of my small part in building something that actually improved people's lives.
I left Chime in 2018, but I think about this feature all the time. The technology to release paychecks early already existed. Legacy banks just chose not to use it. Chime chose differently because we had different incentives and actually gave a shit about our customers.
The most important innovations aren't always technical. Sometimes it's a business model that unlocks later innovation. Sometimes it's just asking "why not?".