JP Morgan Payments and Mastercard have joined forces to launch Pay-by-Bank, an ACH payment solution that works with open banking. The two companies say that the new solution will make it easier for customers to share their financial information with trusted parties.
This will make it possible for customers to pay bills directly from their bank account “with more security.” People won’t have to type in their routing and account numbers every time they need to pay a bill.
For billers and merchants, the solution is supposed to automate the onboarding of new customers and reduce the risk and cost of storing bank information.
Machine learning is also used by Pay-by-Bank to figure out when the best time is to start a payment based on a user’s past transaction and risk patterns.
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The firms say this “protects the consumer and merchant by ensuring important payments get made and can reduce the risk of returns due to insufficient balance”.
The companies say that billers and merchants whose customers already use ACH to pay can add the Pay-by-Bank solution to their existing payment page.
JP Morgan Payments and Mastercard have teamed up to launch Pay-by-Bank, an ACH payment solution which runs on open banking.https://t.co/NwAf4Zp19j
— FinTech Futures (@FinTech_Futures) November 14, 2022
Then, at checkout, customers can choose the Pay-by-Bank option. They will be asked to find their bank, verify themselves using their bank’s authentication, and securely share their bank account information with JPMC so that the biller can get paid.
The solution is being tested with a small number of billers and merchants in the US right now, and it is expected to be rolled out sometime in 2023.
Max Neukirchen, head of payments and commerce solutions at JP Morgan Payments, says the new solution “reduces the likelihood of unauthorised transactions and frees our clients from the need to retain — and the responsibility to securely maintain — consumer banking information”.
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