J.P. Morgan and Mastercard take Pay-by-bank live

J.P. Morgan Payments’ Pay-by-bank solution, which provides billers with the ability to allow their customers to pay bills directly from their bank account, is now live. Leveraging Mastercard’s open banking technology to enhance J.P. Morgan Payments’ ACH capabilities, Pay-by-bank offers payment choice and provides a simple, secure and frictionless experience for billers to offer to their customers.

Verizon is planning to pilot J.P. Morgan Payments’ Pay-by-bank offering with U.S. customers in the coming months.

“This innovative payment option aligns with our commitment to providing our customers with convenient and secure payment choices. We believe that Pay-by-bank will enhance the overall customer experience, making it easier and more efficient for our customers to pay their bills,” said Darrell Conn, Executive Director, Verizon. “We look forward to this partnership with J.P. Morgan and Mastercard to bring more innovative solutions to our customers.”

Pay-by-bank is a payment option that gives merchants the ability to allow their customers to conveniently pay directly from their bank account using traditional ACH banking rails.

“We are dedicated to enabling our clients to offer their customers a variety of payment options,” says Max Neukirchen, Head of Payments & Commerce Solutions, J.P. Morgan. “Our partnership with Mastercard will allow for easy and secure payments directly from bank accounts. We are excited for the future as we have a robust pipeline of biller clients across the U.S. interested to use our Pay-by-bank offering seeking to digitize their processes and increase payments efficiency.”

How it works:

J.P. Morgan Payments’ Pay-by-bank offering addresses multiple pain-points for billers in particular. Billers whose customers already pay with ACH can enable the Pay-by-bank solution on their existing payments page. Consumers can then select “Pay-by-bank.” They will be prompted to choose their bank and agree to securely share their bank account information through Mastercard’s open banking platform for recurring payments like rent, utilities, tuition and account top ups, insurance, and healthcare.

For consumers, Pay-by-bank elevates the checkout experience, allowing billers to provide their customers with the option for a new, secure way to pay. The solution uses the consumer’s existing authentication protocols with their bank, including technologies such as biometrics, to retrieve all necessary information to execute a payment. As a result, they can securely make payments like rent, utilities, tuition, insurance, and healthcare.

For billers, customers that already pay with ACH can enable the Pay-by-bank solution on their existing payments page. Pay-by-bank uses Mastercard’s open banking technology, including Smart Payment Decisioning Tools to analyze the optimal time to initiate the payments based on the bill payer’s historical transaction behavior and risk patterns, which protects both consumers and merchants by helping ensure payments get made and reducing the risks of returns due to insufficient balance. Benefits also include securely receiving consumer-permissioned bank data, which can reduce the likelihood of unauthorized transactions, as well as eliminating the need to retain customer banking information.

“Today’s digital consumer seeks choice and value in every payment interaction,” said Chiro Aikat, EVP, U.S. Market Development, Mastercard. “They also look to gain more power and control over their finances, especially for everyday expenses like monthly bills. Our partnership with J.P. Morgan Payments helps meet this critical need, providing billers and merchants with a payments experience that is simple, seamless, and secure for their customers.”

The launch follows a successful first development stage of J.P. Morgan Payments and Mastercard’s Pay-by-bank partnership, which began in November 2022.

J.P. Morgan Payments is a global leader, processing more than $9 trillion in payments daily, operating in over 160 countries and over 120 currencies.

Pay-by-bank is another innovation in which Mastercard’s Open Banking technology lets people and businesses around the world safely share their data to access innovative experiences, from new ways to pay to secure and frictionless lending. For more than five decades, Mastercard has used responsible data practices to power and protect its global network and the broader digital ecosystem. Mastercard’s Data Responsibility Principles put the individual at the center of its data-design practices: you own it, you control it, you should benefit from the use of it, we protect it.