Neobanks let customers jump queue with early stimulus payouts

With the approval of the coronavirus relief package, consumers anxiously await their stimulus deposits, an area where digital-only banking startups are pulling ahead of incumbent players.

Why should we care?
Many large banks are getting stimulus payouts to customers starting Wednesday, March 17, but digital-only challengers started rolling them out on Friday, March 12. Varo says it processed $150M in stimulus payments for tens of thousands of customers, while Chime says it’s so far deposited $3.5B in stimulus payments. Traditionally, banks wait for funds to arrive through the ACH system before making a payment to consumers, but many neobanks pay out when they’re notified that money is on the way. “It is the same process of what we do on a day-to-basis of crediting paychecks for our members up to two days faster as part of our commitment every day to getting money back in our members' pockets as quickly as possible,” a Current spokesperson told TheFR. “We credit the money before the funds settle, which is how we get them to our members early.” Among Current customers, 50% of stimulus money spent so far has been directed towards paying back friends and family. Meanwhile, big banks took flak for later payout times, with many users taking to social media to express their frustrations.