JP Morgan and Mastercard launch Pay-by-Bank solution

Pay-by-Bank is an ACH payment that uses open banking. This enables consumers to give permission for their financial data to be shared between trusted parties to let them pay bills directly from their bank account with greater security – taking the pain away from having to key in routing numbers and account numbers each time they need to pay a bill.

Billers whose consumers already pay with ACH can choose to integrate the J.P. Morgan Payments Pay-by-Bank solution on their existing payments page. At checkout, consumers select “Pay-by-Bank,” where they will be prompted to find their bank, verify themselves using their own bank’s familiar authentication process — a biometric scan, for example — and securely share their bank account information with JPMC to complete the payment on behalf of the biller.

Pay-by-Bank also uses machine learning in Mastercard’s Smart Payment Decisioning Tools to analyze the best time to initiate the payment based on the bill payer’s historical transaction behavior and risk patterns, which protects the consumer and merchant by ensuring important payments get made and can reduce the risk of returns due to insufficient balance.

This is particularly useful for taking the pain out of recurring payments such as rent, utilities, payments to the government, tuition, insurance, and health care where ACH is the primary medium of payment.  It provides billers and consumers with greater payment choices. For billers and merchants, it automates consumer onboarding and reduces the risk and cost of storing bank account information.

J.P. Morgan Payments and Mastercard are piloting Pay-By-Bank with a small number of U.S.-based billers and merchants this year and expect to expand in 2023.

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