JP Morgan and Mastercard launch ‘Pay-by-Bank’ service
By Gloria Methri
As traditional payment methods like cash and personal checks continue to decline, J.P. Morgan Payments is looking to tap into the growing consumer interest in alternative payment methods by partnering with Mastercard on a new digital banking payment platform.
Mastercard announced that it has teamed up with JP Morgan Payments to develop ‘Pay-by-Bank’, an open banking ACH (Automated Clearing House) payment platform, which enables consumers to pay bills directly from their bank account instead of a card.
This means that customers no longer need to type in account numbers each time they need to pay a bill. For billers and merchants, it automates consumer onboarding and reduces the risk and cost of storing bank account information.
JP Morgan says the offering will be particularly beneficial for recurring payments such as rent, utilities, payments to the government, tuition, insurance, and health care where ACH is the primary medium of payment.
Both companies have agreed to start rolling out Pay-by-Bank with a small number of US-based billers and merchants this year, with an expectation to expand the platform further in 2023.
Max Neukirchen, J.P. Morgan Payments’ Head of Payments, and Commerce Solutions said, “We are delighted to work with Mastercard on this solution as their open banking capabilities will transform the payment experience. Together, we will offer an attractive, simple, and secure Pay-by-Bank solution that gives choice to our clients and their customers who use ACH as their payment mechanism.”
“The technology behind Pay-by-Bank reduces the likelihood of unauthorized transactions and frees our clients from the need to retain — and the responsibility to securely maintain — consumer banking information,” Neukirchen added.
Mastercard North America’s Executive Vice President of Merchants and Acceptance Chiro Aikat said of Pay-by-Bank, “billers and consumers both get greater payment choice, but the partnership also propels payments innovation on two fronts — in the ease of the user experience and in the security of data sharing.”
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May 26, 2023
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