‘Pay By Bank’ Solution Launched By J.P. Morgan And Mastercard

Money movement is something very common and forms a part of our daily lives. With the help of technology and continuous innovation the methods for such movements have changed drastically; be it cash, cheques, cards or ATM or the direct online transfers in real time. The use of cash was predominant upto the last decade on the other consumers are looking for choices like mobile payments, crypto wallets, and person-to-person payment apps. The staple payment methods like cards and bank-to-bank ACH payments are more in vogue in today’s era which makes clients happy and comfortable and easy going. Such ACH payments accounts for trillions of dollars each year and continues to grow. This we call as the application of open banking technology which has turn around the entire methodology and made transactions more simple and safe.

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J.P. Morgan Payments and Mastercard together thought of something innovative and launched a tech known as Pay-by-Bank  which is an ACH payment which uses open banking thereby enabling the consumers to share their financial data seamlessly between trusted parties and to let them pay  for their bills from their bank account directly and safely. The tedious task of typing in the account numbers each time to pay a bill is a past now. For billers and merchants, it has automated the client on boarding and reduced the risk and cost of storing bank data.  

Pay-by-Bank tech basically has been designed for the recurring payments such as rent, utilities, payments to government, tuition, insurance, and health care. In this technology ACH is the primary medium of payment which makes clients work easy and secure. Billers whose consumers already pay with ACH can choose to collaborate with the J.P. Morgan Payments Pay-by-Bank solution on their existing payments page. At the point of the checkout page, they can opt for “Pay-by-Bank,” where they will be asked to choose their bank, and verify using their own bank’s authentication protocols like a biometric scan and thereby securely sharing their bank account data with JPMC to close the payment for the biller. U.S.-based billers and merchants are being used for expansion. 

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“Our aim is to stay at the forefront of payments innovation,” says Max Neukirchen, head of Payments & Commerce solutions, J.P. Morgan Payments. “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 unauthorized transactions and frees our clients from the need to retain — and the responsibility to securely maintain — consumer banking information,” Neukirchen says.  

“Billers and consumers both get greater payment choice,” says Chiro Aikat, executive vice president, Merchants & Acceptance, Mastercard North America, “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 realized years ago that the way people think about money and commerce is changing,” Aikat says. “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 J.P. Morgan Chase, and our opportunity to empower people with enhanced payment experiences.” 

Pay-by-Bank also uses ML in Mastercard’s Smart Payment Tools to evaluate the best time to initiate the payment based on the bill payer’s historical transaction and risk taking patterns. It protects the clients and merchants both and ensures important payments get made and can reduce the risk of returns due to low balance. Mastercard brought its payments expertise into the tech world of account-based payments in 2017 with the acquisition of Vocalink first. Since then, the company has started to focus on their efforts which delivers choice and security in financial service domain which also includes investments in open banking.