Chime filed a short 8-K on 8 September 2026. It had agreed to buy Central Service Corporation, "the parent company of Stride Bank, National Association", for $590 million, subject to the usual price adjustments. Stride is one of the partner banks behind Chime's cards, so on the surface this is a fintech buying its supplier.
I think the price makes sense only through one federal rule. Regulation II caps the debit interchange that large banks can earn, and leaves small banks alone. How much that exemption is worth to a neobank is the question I set out to price.
The cap for covered issuers is written into the rule as "$0.21 plus 0.05 percent multiplied by the value of the transaction, plus a $0.01 fraud-prevention adjustment, if eligible." The exemption applies to an issuer with "total worldwide banking and nonbanking assets... of less than $10 billion as of December 31 of the previous year."
The Federal Reserve publishes what that difference looks like in practice. For 2024 across all networks, exempt transactions averaged $42.27 and 51 cents of interchange, which is 1.21% of value. Covered transactions averaged $48.95 and 23 cents, or 0.47%. So a card issued by a small bank earns roughly two and a half times as much per dollar.
Chime's 2025 annual report gives purchase volume of $133,680 million, "the total dollar value of member purchase transactions using Chime-branded debit or credit cards during a given period, net of any adjustments or refunds." Payments revenue was $1,500.6 million out of $2,186.8 million in total revenue.
Chime ties the two directly: volume drives revenue "because the interchange fees upon which our payments revenue is based are generally determined as a percentage of the underlying transaction value plus a fixed amount per transaction based upon rates set by the card networks."
Divide one by the other and Chime keeps 1.1225% of volume. The company explains that "our contracts with our bank partners entitle Chime to receive from such banks the fees generated from these card programs, less costs associated with our members' transactions and certain fixed fees." A net figure a little under the Fed's 1.21% gross exempt average is what you would expect from that arrangement. The two numbers agree with each other, and I found that reassuring.
Now reprice the same volume at the covered rate, as if Chime's cards sat at a bank above the line: $133,680 million at 0.47% is $628.3 million, against the $1,500.6 million Chime actually booked, and the gap between the two is $872.3 million a year. That equals 39.9% of Chime's total 2025 revenue and 1.48 times what Chime agreed to pay for Stride's parent.
I wanted a second check. I tried another route. The per-transaction gap is 28 cents. At the Fed's average exempt ticket of $42.27, Chime's volume implies about 3,163 million transactions, and 28 cents on each gives $885.5 million. The answers land 1.5% apart, using different Fed inputs.
If you are valuing a partner bank, this is where to look. The exemption is the asset, not the charter. A balance sheet that grows past $10 billion turns a 1.21% revenue line into a 0.47% one, so the buyer has to keep the bank small for the model to hold. Value the target on the regime it preserves and on how its volume is routed.
An earlier version of this piece also cited Visa's purchase of Pismo at $1 billion as a comparable. When I went to check it, both Visa investor pages returned an error. I could not confirm the figure anywhere I trusted, not in a filing, not in a release, not in anything with a date and a signature on it, so it is out. I would rather have one checked case than two where I am guessing about one of them.
I owe you the weak point. It sits in my own number. The exemption is not worth the same on every network, and under Regulation II the merchant chooses the network. On dual-message networks in 2024 the exempt average was 61 cents against 22 cents covered. On single-message networks it was 26 cents against 24, a gap of two cents instead of thirty-nine. That is almost nothing per card swipe.
So if merchants route more volume over single-message networks, most of the advantage disappears without any change in law or ownership. The Fed says as much about its own table, which "does not reflect what a particular issuer will earn by participating in a particular network or combination of networks."
My model has other soft spots too. I will list them plainly. It assumes volume and mix stay the same after repricing. It compares Chime's blended rate, which includes credit cards, with a debit-only Fed average. Move the covered rate 10% either way, to 0.423% or 0.517%, and the exemption value runs from $809.4 million to $935.1 million. It stays above the purchase price across that range.
Oz Shy and Zhu Wang asked in the American Economic Review in 2011, "Why Do Payment Card Networks Charge Proportional Fees?" Their answer is market power on both sides: "when card networks and merchants both have market power, card networks earn higher profits by charging proportional fees." They also find that "merchants are found to earn lower profits under proportional fees, whereas consumer utility and social welfare are higher."
Regulation II swaps a proportional fee for a mostly fixed cap for large banks, which is the fight their model predicts. What I cannot tell from any public document is how Chime plans to keep Stride under $10 billion once its own deposits move in, and that is the number the whole price depends on.