The Public Ledger: Prime Time for Chime

Hello, Fintech Friends!

Shares of Chime rallied more than 20% following the company’s second quarter results released last week, which saw total spending volume (card purchases plus outbound instant transfers, or OITs) growth accelerate meaningfully as the rollout of Chime Prime earlier in year, the company’s most premium membership tier, attracts new higher-earning members and convinces existing members to deposit more and spend more with Chime.

Chime Prime, available free to members that make $3,000 in qualifying direct deposits per month, offers a high-yield savings rate (3.75%), travel perks, priority support, access to Chime’s Instant Loans, and, most importantly, 5% cash back for spending on the Chime Card (Chime’s secured credit card product) at a rotating category of the member’s choice.

Second quarter card purchase volume increased more than 17%, up 5-points from the first quarter, with credit representing 27% of the total, up from 16% during the prior year period. Adding in OITs, total spending volume increased 20% during the second quarter, also a 5-point increase from last quarter. One sign of potential caution is that rewards costs came in higher-than-expected as members focused spending on their cash-back category, like gasoline, limiting the flow-through of volume upside somewhat.

Elsewhere, Chime saw healthy and profitable growth, with Platform revenue up 48%, as OIT and Instant Loan volume and revenue scaled significantly and loss rates remained stable, including a continuation of best-in-class loss rates for MyPay (0.9%), Chime’s short-term liquidity product.

On the strength of its underlying spending momentum and a recently announced 10% reduction-in-force, Chime raised its top and bottom-line outlook for the year, now expecting 25-26% revenue growth and an adjusted EBITDA margin of 17%, up from approximately 6% in 2025.

While Chime’s results show incentives work, incentives are not unique to Chime alone, and have been increasing across the digital banking market, with the ultimate prize being the direct deposit or primary banking relationship. As part of its refined strategy under new CEO Enrique Lores, PayPal plans to invest heavily in financial services for users across PayPal and Venmo, including incentives to habituate behavior.

What may be durable for Chime is its significant cost leadership across key product categories, providing a long runway for Chime to grow and increase profitability while maintaining among the best value propositions for consumers, in my opinion.

Bob Hammel

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On Monday, Adyen* announced it is extending its partnership with Toast to include the United States. Previously, Adyen provided acquiring services to Toast only in its international markets, including the U.K., Ireland, Canada and Australia. Through the twelve months ended June 30, 2026, Toast facilitated more than $215 billion in gross payment volume across 180,000 locations worldwide. In the United States, Toast partners with Worldpay, now owned by Global Payments*, and J.P. Morgan primarily for acquiring services. According to Global Payments, Toast renewed its relationship with Worldpay for a multi-year period earlier this year. Although it is too early to tell how this new deal will impact Toast’s processing share in the United States, historically Adyen has expanded its share of wallet with existing customers over time by demonstrating superior performance.

* As of August 12, 2026, I am long Adyen and Global Payments

Read more: Adyen Expands Global Partnership with Toast into U.S.

Following the departure of Mike Lyons and appointment of Takis Georgakopoulos, former head of the merchant business, to CEO, Fiserv took the opportunity to reduce its outlook for the second half, resetting the earnings base further to grow off in the years ahead, in-line with its stated May 2026 investor day goals of 4-6% annual adjusted revenue growth and more than 300-bps of cumulative margin expansion from 2026 to 2029. The reduction in the second half 2026 outlook reflects a more difficult economic environment in Argentina, slower conversions, delayed or weaker key product launches, and an incremental $100 million technology investment. As a result, Fiserv now expects second half adjusted revenue growth of only 2% versus its previous guidance for a 6-8% increase, and EPS guidance was lowered by about 10% at the midpoint to $7.30 from $8.15.

Read more: Fiserv Reports Second Quarter 2026 Results

Last week, prior to the start of the Senate’s summer recess, Senators Moreno (R-OH), Lummis (R-WY), and King (I-ME) signed on as co-sponsors to the Credit Card Competition Act, joining Senators Marshall (R-KS), Durbin (D-IL) and Welch (D-VT). Senators Moreno’s and Lummis’ involvement is significant because they sit on the Senate Banking Committee, which has jurisdiction over the bill. Additionally, in a Truth Social post endorsing Senator Marshall’s re-election bid, President Trump once again called the ‘Swipe Fee’ a ‘ripoff’ renewing his attack from earlier in the year.    

Read more: Merchants Welcome New Senate Cosponsors of Credit Card Competition Act