Chime Vs Marcus: Completely Different Digital Banks

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For entrepreneurs, Chime is the latest in a flurry of options available for personal banking. Chime is a digital bank that offers customers real-time transaction alerts, instant account opening for business, and no fees on domestic ATM withdrawals.

Chime makes its money by taking interest in customers’ savings accounts. But Chime’s biggest competition could be the incumbent, Marcus by Goldman Sachs. Chime has much more to offer customers than Marcus does, and Chime is only going to get better as it starts branching out and offering other financial services.

Chime aims to have a much more robust savings account than Marcus, which Chime’s CEO Chris Britt contends is Chime’s main differentiator from the competition. Chime also has a rewards system that Marcus does not offer.

Let us review both the banks to see the difference:

What is Chime?

Chime is a new type of digital bank account. Chime offers Chime users low fees, financially motivated education and goals, and Chime cards that Chime users can add to Chime for free.

Chime got started when Chime’s CEO and Founder, Chris Britt, was unable to find a checking account that he liked and Chime was created. Chime is different from most banks because Chime attempts to make its services more user-friendly, financial education-focused, and secure rather than just another bank account.

Chime offers a unique approach to banking by attempting to educate its users on how they can manage their money better and save more, which many believe is the biggest problem that financial service companies need to solve.

Chime has been able to increase its user base from 100,000 in 2014 to 1 million Chime users and Chime is adding approximately 10,000 users a month. Chime has been able to expand into the market because Chime was designed based on customer feedback, 60% of Chime users are under 35 years old and Chime offers low fees for their banking services.

What is Marcus?

Marcus Digital Bank is the most recent offering from Marcus by Goldman Sachs. Marcus being Marcus’ online lending platform, Marcus offers personal loans to consumers in the UK. Marcus is an online bank that lends you money based on your financial history and returns so doesn’t require traditional credit checks or reports.

Although Marcus is a new player in the banking scene, Marcus has managed to acquire a staggering amount of partnerships. Marcus works with Uber to offer Marcus customers cashback on their rides.

Marcus also partners with the likes of Zalando and Deliveroo (a food delivery company) for customer offers and discounts. Marcus’ product offering is currently very thin but should increase its coverage as it matures. Marcus currently offers the following products:

You can switch your existing account to Marcus even if it is with another bank as Marcus does not require a “Core Bank Account”. Marcus will convert all your current accounts into Marcus accounts and then you just need to go through the normal internet banking login process and you’ll be up and running in no time. Marcus also offers an excellent app, which is simple and easy to use making banking on the go easy.

What are the features of Chime Bank?

  • Chime is FDIC insured.
  • Chime uses back-end infrastructure to ensure that its users’ money is always safe and secure.
  • Chime has a smartphone app that allows its users to manage their accounts, pay bills, set up direct deposits, send money, deposit checks into their account using the mobile phone and more.
  • Chime uses Varo’s Varo Money Wallet as their financial app which allows its users to manage all of their accounts in one place, avoid complex bank account numbers, and more.

What are the features of Marcus Bank?

Marcus’s current feature offering is very small, Marcus offers the following features at the moment:

  • Alerts: Get alerted via text/email about specified transactions You can also view and manage all your accounts with Marcus from one account. You will of course need a Marcus account to do this.
  • Payment Tracker: Payments tracker lets you see what payments are due to be made where. Marcus will even track the time left till the payment is expected to clear if it’s a bank transfer. Marcus also provides quick links to make making payments easier than ever.
  • Marcus Pay (Use Marcus to pay your bills): Marcus Pay lets you use Marcus to pay your bills. Marcus does this by letting Marcus look at your transaction history and from that try to figure out what other payments you should be making in the future. You can add Marcus Pay accounts through Marcus’ website or using Marcus’ Android app. Once added you can easily manage all your biller information and Marcus will take care of the rest.

Why should you choose Chime Bank?

  • No Monthly Fees: Chime doesn’t charge a monthly fee for Chime’s accounts. Chime would rather motivate Chime users to manage their money responsibly with Chime’s goal of increasing Chime users’ financial knowledge and Chime does this by charging Chime users no monthly fees. In fact, not only does Chime not charge a fee, they actually refund Chime users for any fees Chime users are charged by Chime’s partnered banks.
  • FDIC Insured: Chime accounts are FDIC insured, which means Chime account holders would be covered in the event of Chime Bank closing. Chime uses an FDIC pass-through insurance structure so each depositor at Chime is insured to at least $250,000, which includes principal and any accrued interest up to that amount.
  • No Overdraft Fees: Chime doesn’t charge Chime users overdraft fees. Chime users can overdraft their accounts because Chime allows Chime users to link their checking accounts with a debit card. Chime’s overdraft fee policy is that Chime Chime will not charge Chime user overdraft fees.
  • No Foreign Transaction Fees: Chime doesn’t charge any foreign transaction fees, which means every time a Chime user makes a payment in Chime, or whatever currency that is not US Dollars or local to the area where the transaction was made there are no foreign transaction fees.
  • Free Spam Protection: Chime offers free spam protection for text messages, phone calls, and emails to protect its users from fraudulent activity associated with financial service providers such as stealing money from Chime.

Why should you not choose Chime Bank?

  • No Personal Touch: The con of Chime bank are the lack of personal touch. Although Chime has a great online banking system, there is no in-person customer service available. For example, if a Chime user wanted to discuss their account with someone at Chime they would have to schedule a call. Chime does have a customer service phone line on the website for questions and answers but it isn’t 24/7 available.
  • Limited Services: The services available with Chime are limited. There isn’t an ability to schedule future payments on Chime’s website either so any scheduled payments have to be done manually.
  • ATM Charges: If using an ATM, however, there will be fees if using an ATM outside of Chime, or whatever currency that is not US Dollars.
  • Spending Limits: Chime users are limited to the amount of money they can spend per month.

Why should you choose Marcus Bank?

  • No minimum requirement: Marcus doesn’t require any minimum deposit as other banks do.
  • Good interest rates: Marcus offers competitive interest rates on personal loans and Marcus is currently the most attractive small loans provider.
  • No credit checks: Marcus does not run a credit check on you so Marcus has no way of judging your creditworthiness even though they offer personal loans. Marcus relies on your previous transaction history to assess Marcus’ risk.
  • Customer Service: Marcus has a very responsive and helpful customer service team Marcus offers support via phone, email, and social media. Marcus also has an excellent FAQ section on Marcus’ website and it also provides support via Marcus’ live chat feature.

Last but not least

  • Marcus is owned by Goldman Sachs: Marcus offers secure banking with no fears of Marcus going bust and Marcus is FDIC insured.

Why should you not choose Marcus Bank?

  • No credit card facility: Marcus does not offer any credit card facility so Marcus is not ideal for people who want to have a Marcus credit card. Marcus offers the Marcus Pay bill-paying service which you can use to pay your utility bills but Marcus’ doesn’t issue a physical piece of plastic.
  • No physical branches: Marcus is purely online so you will need to do everything via Marcus’ website, Marcus app, or Marcus’ customer service team.
  • No investment services: This is Marcus’ biggest drawback, Marcus does not offer any investment advice of any kind. Marcus is purely a eurozone account provider and only offers loans to UK customers at the moment.
  • No ATMs: Marcus is purely online, Marcus does not have any physical branches or Marcus ATMs. Marcus does not offer any Marcus prepaid cards either so Marcus will not be ideal for people who are looking for a Marcus prepaid card. Marcus also charges an ATM fee if you use ATMs other than the ones Marcus has provided Marcus’ customers with.

Is Chime safe?

Chime is safe because Chime has encryption, Chime uses multi-factor authentication, Chime scans for malware and Chime does not store any card data or personally identifiable information. Chime users can learn more about Chime’s security on Chime’s website.

Chime also has an action plan that Chime created to protect Chime users in the unlikely event of a breach by making sure that Chime customers are not responsible for any fraudulent charges and Chime will reimburse Chime users for any unauthorized transactions.

Is Marcus safe?

As Marcus is owned by Goldman Sachs Marcus is safe. Marcus also offers FDIC insured deposits so all Marcus accounts are 100% secure. Marcus comes with an excellent customer service team and Marcus has no physical branches, ATMs, or Marcus prepaid cards so there’s no need to worry about Marcus going bust.

How Chime and Marcus are different?

Chime has a much friendlier website than Marcus, which is incredibly important to establishing customer relations. Chime has a unique layout and no clutter to distract from the content displayed. Chime’s site is simple but easy to navigate.

Chime also has a blog that offers clients insights into how Chime operates, which will help put Chime’s customers at ease by letting them know what Chime does with their money. In stark contrast, Marcus seems very clunky and outdated. Chime’s site is more aesthetically pleasing and easier to navigate than Marcus’ site, which is incredibly important for any consumer-facing business.

Chime is very focused on its marketing outreach and Chime’s social media platforms are well-maintained. Chime has a cleaner, more professional site than Marcus does, which Chime will undoubtedly use to attract new customers.

Marcus is focused on customer service because its core business is lending money. Marcus’ sites are designed for people who are looking to bank with Marcus as their main bank and use it primarily for loans. Chime wants to offer the benefits of being a startup digital bank while still being transparent about Chime’s finances, which Chime has done by sharing Chime’s interest rates.

Chime is aimed at growing businesses and Chime offers business debit cards with no transaction fees for each purchase made with the card. On the other hand, Marcus relies solely on the appeal of Marcus by Goldman Sachs and its online lending services.

How are Chime and Marcus are same?

Chime and Marcus are both online banks, Chime is still in its development stage while Marcus has been operating for years. Chime’s apps are designed specifically for Chime customers while Marcus offers a variety of banking services that cater to everyone.

Chime and Marcus offer interest rates on their savings accounts that are very competitive with the other banks offering similar products. Chime and Marcus hold some of the highest interest rates on their savings accounts.

Final Verdict:

Chime is a lot better than Marcus because Chime has a friendly website, Chime offers business debit cards with no transaction fees for each purchase made with the card. Chime also has an action plan that Chime created to protect Chime customers in the unlikely event of a breach.

Chime’s site is simple but easy to navigate, which is incredibly important for building customer relationships. Chime also has a blog that offers clients insights into how Chime operates, which will help put Chime’s customers at ease by letting them know what Chime does with their money.

I lead product content strategy for SaltMoney. Additionally, I’m helping our broader team of 4 evolve into a mature content strategy practice with the right documentation and processes to deliver quality work. Prior to Instacart, I was a content strategy lead at Uber Eats and Facebook. Before that, I was a content strategist at SapientNitro, helping major Fortune 500 brands create better, more useful digital content.