JP Morgan Payments and Mastercard have teamed up to launch Pay-by-Bank, an ACH payment solution which runs on open banking.
The two firms say that the new solution will enable consumers’ financial data to be shared between trusted parties, allowing them to pay bills directly from their bank account “with greater security”.
Consumers will no longer need to type in routing and account numbers each time they need to pay bills and for billers and merchants, they claim the solution will automate customer onboarding and reduce the risk and cost of storing bank information.
Pay-by-Bank also utilises machine learning to analyse the best time to initiate payments based on a user’s historical transaction behaviour and risk patterns. 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”.
Billers and merchants whose consumers already use ACH for payments will be able to integrate the Pay-by-Bank solution with their existing payments page, the companies say.
Customers can then select the Pay-by-Bank option at checkout, where they will be prompted to find their bank, verify themselves using their bank’s authentication and securely share their bank account information with JPMC to complete the payment on behalf of the biller.
The solution is currently being piloted with a small number of US-based billers and merchants, with a rollout expected 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”. – fintechfutures
Source Link JPMorgan and Mastercard have partnered to introduce a “Pay-by-Bank” system
