JP Morgan and Mastercard Leverage Open Banking to Launch Pay-by-Bank Tool

  • JP Morgan Payments and Mastercard have partnered to launch Payment by bankan ACH payment tool that takes advantage of open banking.
  • Billers who offer consumers an option to pay via ACH can integrate Pay-by-Bank into their existing payment page.
  • Pay-by-Bank is currently in a pilot phase with a small number of US billers, but will roll out to more billers in 2023.

Today’s news proves that you can indeed teach an old dog new tricks. ACH, a technology over 50 years old, gets a facelift with open banking.

JP Morgan Payments and MasterCard joined forces this week to launch Payment by bankan ACH payment tool that leverages open banking data and consumer-authorized data to allow users to easily pay their bills directly from their bank accounts.

“We realized years ago that the way people think about money and commerce is changing,” said Chiro Aikat, executive vice president of Mastercard North America. “They want to pay and be paid how they want, where they want and when they want. We are excited about this new partnership with JP Morgan Chase and our opportunity to give people enhanced payment experiences.

Billers who offer customers the option to pay with ACH can integrate Pay-by-Bank into their existing payment page. Customers who choose to use the new technology will be prompted to find their bank, complete the bank account login process, and share their bank account information with JP Morgan Chase.

Pay-by-Bank enables a better user experience. Consumers will no longer need to enter their routing and account number each time they go to pay a bill. As for billers, they will not face the responsibility of storing consumer account information.

“Billers and consumers both benefit from greater payment choice,” Aikat said, “but the partnership also propels payments innovation on two fronts – in ease of user experience and in security. data sharing”.

Max Neukirchen, head of payment and commerce solutions at JP Morgan Payments, echoed that sentiment. “The technology behind Pay-by-Bank reduces the likelihood of unauthorized transactions and frees our customers from the need to maintain — and the responsibility to securely maintain — consumer banking information,” Neukirchen said.

As an added benefit to consumers, Pay-by-Bank relies on machine learning to estimate the optimal time to initiate payment based on consumer historical transaction behavior and risk patterns. This helps reduce the risk of insufficient funds for the consumer and helps ensure that the merchant receives payment on time.

Pay-by-Bank is still in a pilot phase with a small number of US billers and merchants, but JP Morgan Payments and Mastercard plan to expand the program next year.