JP Morgan Payments’ Pay-by-bank solution is now live. 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. The launch follows a successful first development stage of JP Morgan Payments and Mastercard’s Pay-by-bank partnership, which started in November 2022.

Leveraging Mastercard’s open banking technology to enhance JP Morgan Payments’ ACH capabilities, Pay-by-bank offers payment choices and provides a simple and secure experience for billers to offer to their customers.

Max Neukirchen, Head of Payments & Commerce Solutions, JP Morgan, said: “We are dedicated to enabling our clients to offer their customers a variety of payment options. 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 digitise their processes and increase payments efficiency.”

How Pay-by-bank works

Pay-by-bank allows 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.

Customers who 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 analyse the optimal time to initiate the payments based on the bill payer’s historical transaction behaviour and risk patterns, which protects both consumers and merchants by paymenthelping ensure payments get made and reducing the risks of returns due to insufficient balance. Benefits also include securely receiving consumer-permission bank data, which can reduce the likelihood of unauthorised transactions, as well as eliminating the need to retain customer banking information.

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