US online grocery sales hit record $7.2 billion in June

Despite the slow reopening of the U.S. economy over the past several weeks, online grocery shopping is continuing to reach ever-higher numbers as Americans seem to be in no rush to return to the store. According to new research released today by Brick Meets Click and Mercatus, U.S. online grocery sales hit a record $7.2 billion in June, up 9% over May, as 45.6 million households turned to online grocery pickup and delivery services for a larger portion of their grocery needs.

This figure is higher than the $4 billion seen in March 2020, when the U.S. first went under coronavirus lockdowns. Since then, online grocery sales have been growing quickly — jumping to $5.3 billion in April, then $6.6 billion in May, as more consumers shifted their shopping to online services, grocery included.

The customer base for online grocery also grew from 39.5 million monthly actives in March to now 45.6 million as of June, the report found.

Remarkably, only 16.1 million customers were using online grocery as of August 2019, totaling then just $1.2 million in sales.

The growth isn’t just due to a large influx of new customers to online grocery, but also due to more frequent orders. Customers may be ordering from online services not only for their large “stocking up” trips, but also for those smaller grocery runs they would often do in between — to grab ingredients for their weekly recipes or to replace the more quickly depleted items, like milk, bread and other staples, perhaps.

Image Credits: Brick Meets Click / Mercatus

According to the new research, order frequency ticked up from 1.7 orders per month for active households in May to 1.9 orders in June, demonstrating this increase.

In addition, more retailers, including independents, have added capacity for online order fulfillment amid the coronavirus pandemic to meet consumers’ changing needs. This has also resulted in an increase in sales as more customers are able to shop online and get a time slot for delivery or pickup.

Walmart Grocery in April even began pilot testing a way to offer two-hour “Express” grocery delivery service to customers who were willing to pay an upcharge. The company said this was a direct result of its newly added capacity aimed at serving its online grocery customer base. Instacart, meanwhile, added new features in April aimed at opening more delivery windows. And many retailers — including Amazon, Walmart, Instacart and Shipt, among others — have been hiring to help address the growing number of online orders.

When asked about their increased usage of online grocery in June, consumers reported fears of contracting coronavirus as their main concern, the report said. Specifically, 44% of households claimed they had “high levels” of concern about someone in their home being infected, up 2 percentage points from the prior month. This increase was also almost entirely driven by the 9% increase among shoppers in the over-60 age segment.

But on the downside, the increased choice in online grocery providers has made it more difficult for services to attract repeat usage, the data indicates. As of June, the likelihood of a shopper to use a specific online grocery service again within the next 30 days now sits at 57%. While this figure did grow by 1 percentage point since May, it’s still far below the pre-COVID 74% repeat rate seen back in August 2019. 

General interest in online grocery was also growing. Among both active online grocery shoppers and those not active, 32% said they were either “extremely” or “very likely” to use a service in the next 90 days — up 2 percentage points from May. The interest, not surprisingly, was strongest in households that had used an online grocery service in June, with 57% showing strong interest, compared with only 17% of the non-active households.

The data for the research was sourced from 1,781 U.S. adults in June (6/24-6/25), with responses weighted by age to reflect the national population of U.S. adults. The firms’ prior surveys also used a similar methodology, timing and sampling.

“Even though some retailers have seen sales decline within their respective business, the new reality of increased capacity across the market – and related greater choice (or options) for shoppers – means that all grocery retailers will need to accelerate their efforts to make shopping online even more seamless to thrive going forward,” said David Bishop, partner and research lead, Brick Meets Click, in a statement.

Instagram Reels arrives in India following TikTok’s ban

In the wake of India’s decision to ban TikTok and other dozens of other Chinese apps over privacy concerns, Instagram has expanded its TikTok rival, known as Reels, in the region. The launch in India also comes only days after Facebook announced its standalone TikTok clone, Lasso, would be shutting down on July 10.

In addition to India, Instagram Reels is live in Brazil, and of recently, France and Germany. But an Instagram spokesperson hints the expansion may go even broader, without offering specific details.

“We’re planning to start testing an updated version of Reels in more countries,” a spokesperson told TechCrunch, when asked about the feature’s arrival in India. “Reels,” they added, “is a fun, creative way for people to both express themselves and be entertained.”

Unlike Lasso, which had been its own separate app, Reels has been designed to be a feature within Instagram itself. Reels allows users to create and post short, 15-second videos set to music or other audio, similar to TikTok. Also like TikTok, the feature offers a set of editing tools — like a countdown timer and those that adjust the video’s speed, for example — that aim to make it easier to record creative content. However, Instagram doesn’t have the same sort of two-tabbed, scrollable feed, like TikTok offers, just for watching Reels’ content.

Following the launch of Reels last year in Brazil, Instagram updated the feature based on user feedback. Users said they wanted a space to compile their Reels and watch those made by others. To address these concerns, Instagram moved Reels to a dedicated space on the user Profile page and now features Reels in its Explore section, if they’re published by a public account. That gives Reels the potential to go viral by catching the eye of Instagram users who don’t yet follow the creator’s account. (Before, Reels had been only available to Instagram Stories, which limited their exposure.)

Business Insider India was the first to report on Reels’ expansion in India, citing unnamed sources for the discovery.

The Reels launch is timely for a number of reasons. For starters, Facebook in June announced it had entered a global deal with Saregama, one of India’s largest music labels, which would allow it to license music for videos and other social experiences across both Facebook and Instagram. Facebook also has agreements with other Indian labels, including Yash Raj Films, Zee Music Company and T-Series. However, the addition of Saregama may have cleared the path for Reels to launch given the breadth of its content, which includes over 100,000 tracks like those from Indian music legends, plus Bollywood tunes, devotional music, ghazals, indipop and others.

But mainly, it’s ideal timing for Reels to come to India, given the country’s decision to ban TikTok.

The ban on Chinese apps knocked out TikTok from its largest overseas market, leaving a massive opportunity for Instagram to swoop in and pick up new users for Reels. Before its removal, TikTok had amassed more than 200 million users in India, which is a significant loss for the Beijing-headquared video app.

But Instagram is not without competition for those users. Reuters recently reported a surge in popularity for other Indian video-sharing apps, like Roposo, Chingari and Mitron, for example. Roposo even saw its user base jump by 22 million in the two days after India banned TikTok, the report noted.

Instagram didn’t indicate when Reels would launch in other key markets, like the U.S.

 

 

‘Hamilton’ gives Disney+ a holiday weekend bump in U.S., with app downloads up 72%

The much-anticipated addition of “Hamilton” seems to have paid off for Disney+. According to new data from app store analytics firm Apptopia, Disney’s streaming service saw a big jump in downloads over the July 4 holiday weekend in the U.S., following the worldwide debut of “Hamilton” on Friday, July 3rd. Between Friday and Sunday, that translated to over half a million new global downloads (513K+) for the Disney+ mobile app, excluding India and Japan. Some 266,084 of those downloads were in the U.S, the firm estimated.

These figures represent a 46.6% increase over the average seen during the previous four weekends in June (Friday through Sunday), Apptopia noted. But the numbers don’t include India or Japan as Disney+ is streamed via Hotstar in the former; and in the latter, via a partnership with NTT Docomo through an existing service that later transitioned to Disney+.

The download figures also represented a 72.4% increase over the four prior weekends in June, in the U.S, indicating that a significant amount of interest in “Hamilton,” not surprisingly — given its “founding fathers” subject matter — comes from U.S. subscribers.

Notably, these downloads represent paid subscribers, not free trial users, as Disney+ ended its free week-long trial offering back in June. 

Rival firm Sensor Tower estimates a slightly different “Hamilton”-related bump for Disney+. During the week of June 29 to July 5, downloads spiked 64% over the week prior, Yahoo reported.

Apptopia also founded that “Hamilton” represented the biggest content launch of all of 2020, so far, in terms of downloads. That means it also outpaced the streaming launch of “Frozen 2,” which arrived while consumers were under coronavirus lockdowns. It was also bigger than “Onward,” “Artemis Fowl,” and others, the firm found.

Image Credits: disney

Of course, mobile download numbers don’t provide a full picture of how many signed up just for “Hamilton.” Many of the new Disney+ subscribers likely only signed up via a TV app and have yet to download the mobile companion.

If Roku’s online channel store offered a “top charts” section with rankings, we would have another window into Disney+ popularity given its status of a top streaming device and TV maker in the U.S. But it’s worth pointing out that Roku’s user base has given the Disney+ app a 4.3-star rating across 1,55,006 total reviews. For comparison, Netflix has 3,675,383 reviews — which shows how quickly the still relatively new service Disney+ is gaining on the market leader.

In May, Disney announced its streaming service had grown from 33.5 million subscribers as of March 28 to 54.4 million Disney+ subscribers as of May 4.

The service appeals to those who follow Disney’s top brands like Star Wars and Marvel, for example, but it’s also found a lot of growth among families who now more than ever need content to keep kids entertained amid the coronavirus outbreak, which has limited families’ usual activities and kept kids indoors. And at the $6.99 per month price point (or $69.99/yr), it’s one of the more affordable streaming services available.

 

 

This Week in Apps: India bans Chinese apps, Apple freezes game updates in China, iOS developer backlash continues

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, we’re tracking the continued ramifications of the in-app purchases incident ignited by Basecamp, which has emboldened more developers to voice their gripes with Apple publicly in the past few days. The app stores are also this week enmeshed in world of politics, ranging from the India-China border dispute to apps impacted by China’s big brother-esque regulations to the latest with Apple’s antitrust probe.

HEADLINES

Dozens of Chinese apps banned in India

In a major upset to mobile app businesses competing on a global stage, India this week blocked 59 apps developed by Chinese firms, due to concerns that the apps were engaging in activities that threatened the “national security and defense of India,” according to the Indian government.

The ban itself is a political power move as it follows deadly clashes between Indian and Chinese troops along the disputed Himalayan border in June, which led to the death of at least 20 Indian soldiers on June 16. (China didn’t disclose its casualties.) Indian government officials claimed they had received reports of the apps stealing and transmitting user data in an unauthorized manner to servers outside the country. This is what necessitated the ban, they said.

India’s move could prove to have larger repercussions, as it sets the stage for a world where Chinese internet companies are excluded from key markets. This isn’t something that’s limited to apps, of course. For instance, the  U.S. is rallying its allies to stop using Huawei technologies for 5G. But China’s policies could mean its more successful apps, like TikTok, will lose key markets and therefore, forfeit revenue and power.

  • India’s ban threatens TikTok’s growth in a key market 

The move to ban the Chinese apps in India most notably impacts TikTok. To date, India had been the app’s largest overseas market until now, with some 200M+ users across around 611M lifetime downloads. In the most recent quarter, TikTok and the 58 other banned apps combined, had been downloaded around 330M times. The ban is estimated to impact roughly one in three smartphone users in India, according to research firm Counterpoint.

Google and Apple began to comply with New Delhi’s order on Thursday, to prevent Indian users from accessing the banned apps. In addition, India’s Department of Telecommunications ordered telecom networks and ISPs to block access to those 59 apps immediately.

Kevin Mayer, the chief executive of TikTok, said on Wednesday his app was in compliance with Indian privacy and security requirements and he was looking forward to meeting with various stakeholders in the Indian government to discuss.

Apple launches an online portal for Apple Card account holders

Apple today has launched an online portal for its Apple Card credit card, allowing account holders to manage their balances, view statements, schedule payments and more. The portal, card.apple.com, will be particularly useful in case you lose or misplace your iPhone and need to manage your card or pay your bill. In the past, you would have had to contact Goldman Sachs directly to do so.

The new site also offers an easy way to pay your balance when you’re at your desktop or laptop working on your monthly budgeting and bills, instead of having to go get your iPhone.

To use the site, cardholders will log in via their Apple ID. You can then view your card balance, available credit, next payment due date and amount on the homescreen. The main page also offers quick access to set up scheduled payments — a feature some cardholders may have not realized existed, as it was buried under the three-dot “more” menu when viewing their Apple Card in the Wallet app.

From the left-side navigation, you can browse your past statements or download them as PDFs.

And from the other settings, you can link or remove connected bank accounts, contact support, read the card terms and more.

What’s missing, however, is a way to remotely lock the card or request a replacement, in the event the card has been lost or stolen. Those features are still only available with the Wallet app, which is also where you can mange your Express Transit settings and your push notifications.

Apple says the full Apple Card experience is designed for iPhone, while the website is meant for making and scheduling payments, and other common tasks.

The lack of a website for card management had been one of the few quirks about Apple’s modern credit card. Though it’s convenient to have a built-in way to manage the card and pay the bill right from your iPhone, credit card holders still expect to be able to access their cards through the web, as well.

The launch of the online portal quickly follows Apple’s debut of Path to Apple Card, a four-month credit worthiness improvement program focused on getting more consumers qualified.

Venmo begins piloting ‘Business Profiles’ for small sellers

Venmo is going after small businesses. The mobile-payments app announced today it’s piloting a new feature called Business Profiles, which offers small sellers and other sole proprietors the opportunity to have a more professional profile page on its platform. Sellers can share key business details like address, phone number, email, website and more.

By adopting a Business Profile, sellers will be able to raise awareness about their business through Venmo’s social feed and search, as well as keep their personal transactions separate from those for their businesses for accounting purposes.

The profiles give smaller sellers a way to do business without having to necessarily establish a larger web presence, like a Facebook Page or Google Business listing, for example.

Instead, Venmo’s Business Profiles may be better suited to sellers such as local artists, crafters, or farmer’s market booth holders, or those who casually use Venmo to support the income they receive from side-hustles, such as mowing lawns or doing neighborhood home repair jobs.

As Venmo users pay these small sellers, the payment is published to the Venmo social feed where friends or even the public can view the transaction, depending on the user’s privacy settings. Interested friends and neighbors could then click on the Business Profile to learn more about the seller, as these new profile pages also offers a space to write a short introduction to business.

They’ll also be able to see how many customers the seller has and if any of their Venmo friends have ever transacted with the seller. Sellers can also email, print out, text or AirDrop their Venmo QR code for their profile to make it easier for customers to find their business on the app.

In addition, a new Venmo Search experience would allow users to switch between a “People” and “Business” tab when looking for a particular Venmo username.

Businesses with a profile page will be able to more easily track their transactions without having to create a separate account. Instead, users will be able to switch between their personal accounts and business profiles from the same log-in.

PayPal-owned Venmo says the new feature will also offer transactional insights and information, including number of customers and a customer list.

The system would formalize what’s already a top use case for Venmo’s platform. It would also offer Venmo a way to expand its revenue opportunities. Though the service is free during the pilot, Venmo indicates that may not always be the case.

In an online FAQ about the new feature, Venmo notes that in the future, business owners would be changed a per-transaction fee of 1.9% + $0.10 on every payment made to their profile. This is still a lower fee than Square charges or even Venmo parent PayPal.

The new feature, however, isn’t just about offering a new way for sellers to transact. Because Venmo is also a social platform, sellers can tap into the network effects it provides — similar to Messenger or WhatsApp, where businesses often now have their own profiles.

The addition comes at a time when the coronavirus outbreak just took a hit on PayPal’s larger business, leading it to miss on Q1 earnings. Venmo, however, was a bright spot in terms of growth, with total payment volume in the quarter reaching $31 billion, up 48% year-over-year. PayPal had also said its net new actives hit records in April as consumers shifted to online and contactless payments — a trend that could play out further in Q2. Venmo was a big contributor to this growth and even saw its highest transactions ever on May 1.

Venmo’s Business Profiles feature is starting to pilot today with a limited number of users on iOS. It will roll out to Android in the week ahead, and in the coming months will become more broadly available.

Instagram’s latest test puts all Stories on one page

Instagram Stories has grown to become one of Facebook’s best products to date. As of last year, roughly half of Instagram’s users — or 500 million people — were interacting with Stories on a daily basis. That’s nearly double the entire daily active user base of all of Snapchat, which first popularized the Stories format. Now, it appears Instagram is testing a way to expand the Stories experience, making it a more of a central focus in the Instagram app.

The company is newly testing a feature that will allow Instagram users to see more Stories at once, both on the home screen and in a new Stories-only experience.

In the test, users will initially see two rows of Stories instead of one at the top of the screen when they first open the Instagram app. A button will also appear beneath this expanded Stories area that lets you click to “See All Stories.”

This will then launch a new screen where you can view and scroll through all your available Stories in a full-screen experience.

The feature was first spotted by California-based social media manager Julian Gamboa late last week, who shared a screenshot of the new Stories interface to Twitter.

Instagram confirmed to TechCrunch this is a test with a small number of users for the time being. The company declined to provide further details, but said the test has been live for over a month.

It’s not surprising to see Facebook toying with ideas that would allow it to push more users to engage with Stories, given the product’s massive appeal, growth, and increasing importance to Facebook advertisers.

In Q3 2019, Facebook called Stories one of its biggest growth areas, noting that then 3 million of its 7 million total advertisers were now advertising across Facebook, Instagram and Messenger Stories combined. By Q4, the number of advertisers using Story Ads had grown to 4 million.

To cater to advertisers’ needs, Facebook last year introduced customizable templates where businesses can upload their photos and videos, then choose from different layouts, color and text options to make more engaging Stories. And to make it easier to participate in Stories, Facebook now allows advertisers to buy across Facebook, Messenger, and Instagram all at once.

When Facebook reported its Q1 2020 earnings, it noted the total number of ad impressions across its services had grown by 39%. It attributed the jump to both engagement increases across feed products and Stories combined.

However, Facebook has often said that Stories ads monetize at lower rates than News Feed — something the company believes will change in the long run as more advertisers migrate to Stories.

Given this context, it’s interesting to see Instagram testing a full-screen, scrollable Stories experience in the app. If Instagram decided to launch this product publicly, it could capture more daily users and then, in turn, more advertisers.

“We’re always testing new ways to improve the Instagram experience for our community,” a Facebook company spokesperson said, in reference to the test.

Google brings its AI-powered SmartReply feature to YouTube

Google’s SmartReply, the four-year old, A.I.-based technology that helps suggest responses to messages in Gmail, Android’s Messages, Play Developer Console, and elsewhere, is now being made available to YouTube Creators. Google announced today the launch of an updated version of SmartReply built for YouTube which will allow creators more easily and quickly interact with their fans in the comments.

The feature is being rolled out to YouTube Studio, the online dashboard creators use to manage their YouTube presence, check their stats, grow their channel, and engage fans. From YouTube Studio’s comments section, creators can filter, view and respond to comments from across their channel.

For creators with a large YouTube following, responding to comments can be a time-consuming process. That’s where SmartReply aims to help.

Image Credits: Google

Instead of manually typing out all their responses, creators will be able to instead click one of the suggested replies to respond to comments their viewers post. For example, if a fan says something about wanting to see what’s coming next, the SmartReply feature may suggest a response like “Thank you!” or “More to come!”

Unlike the SmartReply feature built for email, where the technology has to process words and short phrases, the version of SmartReply designed for YouTube has to also be able to handle a more diverse set of content — like emoji, ASCII art, or language switching, the company notes. YouTube commenters also often post using abbreviated words, slang, and inconsistent use of punctuation. This made it more challenging to implement the system on YouTube.

Image Credits: Google

Google detailed how it overcame these and other technical challenges in a post on its Google AI Blog, published today.

In addition, Google said it wanted a system where SmartReply only made suggestions when it’s highly likely the creator would want to reply to the comment and when the feature is able to suggest a sensible response. This required training the system to identify which comments should trigger the feature.

At launch, SmartReply is being made available for both English and Spanish comments — and it’s the first cross-lingual and character byte-based version of the technology, Google says.

Because of the approach SmartReply is now using, the company believes it will be able to make the feature available to many more languages in the future.

Facebook shuts down Hobbi, its experimental app for documenting personal projects

Facebook’s recently launched app, Hobbi, an experiment in short-form content creation around personal projects, hobbies, and other Pinterest-y content, is already shutting down. The app first arrived on iOS in February as one of now several launches from Facebook’s internal R&D group, the NPE Team.

Hobbi users have now been notified by way of push notification that the app is shutting down on July 10, 2020. The app allows users to export their data from its settings.

In the few months it’s been live on the U.S. App Store, Hobbi only gained 7,000 downloads, according to estimates from Sensor Tower. Apptopia also reported the app had under 10K downloads and saw minimal gains during May and June.

Though Hobbi clearly took cues from Pinterest, it was not designed to be a pinboard of inspirational ideas. Instead, Hobbi users would organize photos of their projects — like gardening, cooking, arts & crafts, décor, and more — in a visual diary of sorts. The goal was to photograph the project’s progress over time, adding text to describe the steps, as needed.

The end result would be a highlight reel of all those steps that could be published externally when the project was completed.

But Hobbi was a fairly bare bones app. There was nothing else to do but document your own projects. You couldn’t browse and watch projects other users had created, beyond a few samples, nor could you follow top users across the service. And even the tools for documentation were underdeveloped. Beyond a special “Notes” field for writing down a project’s steps, the app experience felt like a watered-down version of Stories.

Image Credits: Hobbi

Facebook wasn’t alone in pursuing the potential of short-form creative content. Google’s internal R&D group, Area 120, also published its own experiment in this area with the video app Tangi. And Pinterest was recently spotted testing a new version of Story Pins, that would allow users to showcase DIY and creative content in a similar way.

It’s not surprising to see Hobbi wind down so quickly, given its lack of traction. Facebook already said its NPE Team experiments would involve apps that changed very rapidly and would shut down if consumers didn’t find them useful.

In addition to Hobbi, the NPE Team has launched a number of apps since last summer, including meme creator Whale, conversational app Bump, music app Aux, couples app Tuned, Apple Watch app Kit, audio calling app CatchUp, collaborative music app Collab, live event companion Venue, and predictions app Forecast. Before Hobbi, the only one to have shut down was Bump. (Some are not live in the U.S., either.)

Of course, Facebook may not intend to use these experiments to create a set of entirely new social apps built from the ground-up. Instead, it’s likely looking to collect data about what features resonate with users and how different creation tools are used. This is data that can inform Facebook’s development of features for its main set of apps, like Facebook, Messenger, WhatsApp and Instagram.

We’ve reached out to Facebook for comment but one had not been provided at the time of publication.

U.S. challenger bank Chime launches Credit Builder, a credit card that works more like debit

U.S. challenger bank Chime, now valued at $5.8 billion, is entering the credit card market with today’s launch of a new card designed to help consumers build their credit history by way of everyday transactions. With the Chime Credit Builder Visa Credit Card, users can control how much they want to spend by transferring funds to a “Spending Account” and can then charge up to this amount wherever Visa is accepted.

This makes the card feel more like a debit card, as it’s tied to how much cash is in a user’s bank account — rather than a traditional credit card which can allow for overspending.

Chime wanted to develop a new kind of credit card experience due the growing popularity of debit cards in the U.S. In 2018, the U.S. Federal Reserve said debit cards represent 50% of all non-cash transactions, the company noted. And younger consumers, in particular, prefer debit over credit, Chime had reported in the past. In a 2015 survey, Chime found that 67% of millennials prefered debit cards, which they feel are more secure and less likely to get them into debt.

However, relying on debit cards alone means younger consumers aren’t building up their credit history — a decision that will come to matter when it’s time to finance a larger purchase, like a house.

“Americans have embraced debit cards for greater control but this limits their ability to establish or build their credit score,” noted Chime CEO Chris Britt, in a launch announcement. “We created Credit Builder to help our members stay in control and safely build their credit with their everyday purchases,” he said.

Chime’s credit card aims to straddle both worlds, debit and credit, by working to establish good credit while also preventing users from overspending.

To make this work, Chime users first add money to their Chime Spending Account and then charge their everyday purchases — like gas, groceries or subscriptions — using the credit card. At the end of the month, Chime’s Safer Credit Builder feature will automatically pay off the credit card balance from the secured account on time. It then reports the credit card payment to the major credit bureaus, including TransUnion, Experian, and Equifax.

The card also has the appeal of a debit card for its lack of fees. It doesn’t include an annual fee, interest or a minimum security deposit, like many of the secured credit cards it competes with.

The company has been thinking about how to better address the credit building needs of its users for some time. In fall 2018, Chime acquired the credit score improvement service Pinch which had focused on helping young adults build better credit. The startup was best known for a service called PinchRent, which reported on-time rent payments to credit bureaus to help its users increase credit scores.

Chime says it took learnings from Pinch and tapped into the team’s expertise in its creation of Credit Builder.

Chime has been beta testing Credit Builder since June 2019 and the service has grown to reach over 200,000 enrollees. During the test period Credit Builder has helped users increase their credit score by an average of 30 points, Chime says, citing data from Transunion. In addition, it helped 95% of members with no credit history establish a credit score for the first time. Anecdotal reports from its users, like these discussions on Reddit, also appear to support Chime’s statements about the card’s ability to improve their credit.

Today, Chime is opening up access to the waitlist for Credit Builder to all its Chime banking customers and it will roll out the service to more members every week over the summer.

Chime’s mobile banking app is now one of many challenger banks in the U.S. aiming to  address a younger generation’s shift away from big banks with physical branches to modern, mobile and digital banking experiences. Chime, however, is not a bank itself. Instead, banking services provided by The Bancorp Bank or Stride Bank, N.A., Members FDIC. The Credit Builder card is also issued by Stride Bank.

Like many of its rivals, Chime offers free checking accounts, with no overdraft fees, early access to direct deposit paychecks, automatic savings, and more. But Chime has outpaced much of its competition, having raised a $500 million round in late 2019 to value its business at $5.8 billion — a sizable increase from the $1.5 billion valuation it had earlier in 2019. It’s now growing at 4x year-over-year, the company says, and reached 8 million FDIC-insured accounts as of February 2020 according to Bloomberg.

Chime’s Credit Builder launch follows yesterday’s debut of the Apple Card “Path” program, which also helps to tackle the issue of young people who can’t quality for credit. In its case, the program alerts users to ways to improve their creditworthiness, like making payments to secured cards or resolving past due balances. This program, is more educational in nature, however, whereas Chime’s Credit Builder is about actual credit-building through transactions and payments.