Following a trial run which launched in November 2022, J.P Morgan Payments‘ Pay-by-bank solution is finally live.
Using Mastercard’s technology, Pay-by-bank enables customers to pay bills directly from their bank account using traditional ACH banking rails. It offers them payment choices and offers a secure experience for billers to offer to their customers. Additionally, Verizon, the multinational telecommunications conglomerate, will pilot the official launch of the product for US consumers.
Pay-by-bank will benefit both billers and consumers as it looks to tackle various pain points in the bill payment process.
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. Examples include rent, utilities, tuition and account top ups, insurance, and healthcare.
“We are excited for the future as we have a robust pipeline of biller clients across the US interested to use our Pay-by-bank offering seeking to digitise their processes and increase payments efficiency.” – Max Neukirchen
Pay-by-bank allows billers to provide their customers with the option for a new, secure way to pay. This in turn, can greatly improve the checkout experience. 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.
This is based on the billpayer’s historical transaction behaviour and risk patterns. In turn, this 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-permission bank data, which can reduce the likelihood of unauthorised transactions. Additionally, it eliminates the need to retain customer banking information.
The potential of open banking
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.
“We are dedicated to enabling our clients to offer their customers a variety of payment options,” says Max Neukirchen, head of payments and 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 US interested to use our Pay-by-bank offering seeking to digitise their processes and increase payments efficiency.”
“Today’s digital consumer seeks choice and value in every payment interaction,” said Chiro Aikat, EVP, US 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.”