The new payments solution automates consumer onboarding and reduces the risk and cost of storing bank account information for billers and merchants, along with easing the recurring payments where ACH is predominantly used for payment
JP Morgan, Mastercard unveil Pay-by-Bank. (Credit: Patrick Tomasso on Unsplash)
JP Morgan Payments and Mastercard have unveiled Pay-by-Bank, an ACH payment service that uses open banking to enable customers to make payments directly from their bank account.
Pay-by-Bank consumers can allow their financial data to be shared between trusted parties, which prevents them from typing the account numbers each time they make a payment.
For billers and merchants, the new payments solution automates consumer onboarding and reduces the risk and cost associated with storing bank account information.
Also, Pay-by-Bank simplifies recurring payments for billers, such as rent, utilities, tuition, insurance, and healthcare, where ACH is predominantly used for payment.
JP Morgan payments and commerce solutions head Max Neukirchen said: “Our aim is to stay at the forefront of payments innovation. We’re 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. This is part of J.P. Morgan Payments’ vision to accept any payment, anytime, anywhere.
“The technology behind Pay-by-Bank reduces the likelihood of unauthorised transactions and frees our clients from the need to retain, and the responsibility to securely maintain consumer banking information.”
The billers whose consumers already pay with ACH can integrate the new Pay-by-Bank solution on their existing payments page.
The consumers can complete the payment by finding their bank, verifying their identity using the bank’s authentication process, and securely sharing their bank account information.
Pay-by-Bank leverages Mastercard’s Smart Payment Decisioning Tools to analyse the bill payer’s transaction behaviour and risk patterns, to initiate the payment at the right time.
The approach is said to help both the consumer and merchant by enabling important payments and reducing the risk of returns due to insufficient balance.
Furthermore, JP Morgan Payments and Mastercard are testing Pay-By-Bank in a small group of billers and merchants in the US, this year and are planning to expand it in 2023.
Mastercard North America merchants and acceptance executive vice president Chiro Aikat said: “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.”
“We realised years ago that the way people think about money and commerce is changing. They want to pay and get paid how they choose, where they choose and when they choose.
“We’re excited by this new partnership with JP Morgan Chase, and our opportunity to empower people with enhanced payment experiences.”