Dive Brief:
- Chime’s new partnership with Walgreens will allow the neobank’s customers to deposit cash for free at the retailer’s more than 8,500 locations, the fintech announced in a blog post Monday.
- The San Francisco-based company claims 78% of its estimated 12 million customers live near a Walgreens location.
- The latest fintech-retail partnership comes as Walgreens is moving deeper into financial services. The retailer in September launched Scarlet, a debit card and mobile banking app for Walgreens customers.
Dive Insight:
"We know having access to a physical location for cash deposits is important to our members, and until recently, the options have been limited," Chime co-founder and CEO Chris Britt said in a statement, according to Bloomberg.
Walgreens joins CVS, Walmart and 7-Eleven in allowing the digital bank’s customers to make deposits at their brick-and-mortar locations. Walgreens, however, is the only retailer to do so without charging Chime customers a fee.
For companies like Walgreens, inking such deals with fintechs and payments companies could help the retailer strengthen ties with existing customers and attract new ones.
The Federal Deposit Insurance Corp. (FDIC)-insured Scarlet accounts are available through a partnership with MetaBank. The retailer is also using payments technology company InComm Payments’ banking-as-a-service (BaaS) platform, while Mastercard is issuing debit cards for the accounts.
Walgreens in March said the bank accounts are part of its "alternative profit strategy" — one element in a broader initiative to launch new financial products and services that offer differentiated services and benefits to its customers.
In a statement earlier this year, InComm Payments President Stefan Happ said its deal with the retailer "will establish Walgreens as a destination for financial services, building on Walgreens’ legacy as a one-stop shop for pharmacy and convenience."
The retail benefit
For digital banks whose target market is a demographic that lives paycheck to paycheck, such as workers in the service industry who often receive cash tips, the ability to offer deposits at retail locations is an important service for their customers.
Digital bank Green Dot boasts a network of retailers that consists of 90,000 physical locations it refers to as "financial centers."
"[Our customers] want to withdraw cash, and they want to deposit cash. Every cashier carries cash, and it's very helpful for our customer base," Abhijit Chaudhary, head of Green Dot’s direct-to-consumer business, told Banking Dive in October, referring to the company’s retail partnerships, which include Walmart, Walgreens, CVS, Family Dollar, Dollar General and 7-Eleven.
