Banks take in deposits from customers and pay them interest. Then, they lend that money out to other customers, charging interest. Traditional banks make money on the spread, or, the difference between the deposit and loan rates.
following its massive $500 million Series F. The round was the largest single equity investment in the neobanking space, a record previously held by Brazil's Nu Bank, according to CB Insights.Since they're not lending, neobanks rely on other sources of revenue. Interchange fees, for example, are paid by merchants to the banks for processing debit card transactions.
And their customer bases are growing. In September last year, Chime announced it surpassed the 5 million account milestone. Germany's N26, founded in 2015, announced it has more than 3.5 million customers as of last June.not necessarily the same as the number of active deposit customers
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