Saving limits are reassessed every few days, before being sent to an instant access savings account hosted by Barclays Bank PLC. Chip currently claims 30,000 active users and has processed £6.7m worth of transactions, setting its sights on 500,000 active users by 2020.
The app initially set itself a target of a £600k raise, but has blasted its way past that as it seeks to raise funds to apply for a banking license in the near future. This latest fundraise is part of a larger £2.4m round, set to close next year.
Although Chip has no intention of offering a current account, a banking license is thought to be necessary for Chip to develop a new suite of products for users that capitalise on Open Banking regulations.
According to TechCrunch, this offering will include an alternative to an existing current account overdraft with a lower and more flexible interest rate, a product which has already entered beta testing.
Speaking to the news site, Chip founder and CEO Simon Rabin said: “In order to offer the customer a 10x better product experience, you can’t just resell them the existing market. All that makes you is a slightly better money supermarket!
Commenting on the plans for a banking license: “We learnt this summer that customers love the smart credit functionality but we can’t make it viable within the existing wholesale funding market.”