(Reuters) -U.S. digital bank Chime is launching a product that will allow customers to access up to $500 of their wages before payday, the latest move by a financial technology company to enter the fast-growing "earned wage access" market.

The product, which will be rolled out in coming months, comes as Chime is preparing to become a public company in the "not too distant future," CEO Chris Britt said in an interview with Reuters.

Earned wage access (EWA) products enable workers to receive a portion of their wages ahead of payday, often via a membership service or for a fee. Providers say the products offer crucial assistance to Americans living paycheck-to-paycheck, particularly gig workers and freelancers. Critics say the products do not have the same consumer protections as loans.

Chime says the product - called MyPay - has no mandatory fees or interest and does not require a credit check. MyPay estimates a customer's wages for the cycle based on historical data and offers the person up to $500 of the forecast earnings.

Chime is known for products that offer users' short-term liquidity, like its fee-free overdraft service.

"We think it's a natural extension of what we've been good at," Britt said.

While Chime did not disclose if it planned to generate revenue on the new product, the company anticipates MyPay will drive greater engagement and product usage among its current customers and will also prove successful for customer acquisition, said Britt.

As EWA has grown in popularity, it has drawn scrutiny of regulators, who have debated whether the product should be classified as a loan. Such a classification would impose interest rate caps and require additional disclosures.

Several states, including Wisconsin and Nevada, have established licensing regimes for the products, stipulating that they are not loans.

The U.S. Consumer Financial Protection Bureau indicated late last year that it would soon issue guidance on how consumer lending laws should apply to EWA, but said it was also supportive of states creating oversight frameworks for EWA.

Chime has long been thought of as a likely candidate for an initial public offering next year, having lined up Goldman Sachs in 2022 for early preparations. A spokesperson for Chime denied at the time that Goldman Sachs was advising the company.

It has 7 million monthly active users and was profitable in the first quarter of this year, Britt said.

"It's unlikely to be this year, but we are for the most part IPO-ready," he said. "This year is mostly heads down, continuing to get even more momentum with our suite of products."