JPMorgan Chase and Mastercard have announced a partnership that will enable consumer data to be shared by “trusted” entities and allow consumers to pay bills from their bank account with greater ease and security.
Called Pay-by-Bank, the solution will even use machine learning to determine the best time to initiate payments based on a consumer’s historical transactions, behavior, and risk patterns.
When making ACH transactions, consumers will no longer have to remember or use their bank’s routing number or account numbers, and will also eliminate the need for companies to store such information, reducing their risk and costs.
Consumers will start seeing “pay by bank” options at online checkouts. When prompted, they will find their bank, verify themselves using the bank’s authentication protocols, and securely share their information to complete the payment.
The product is currently being tested with a small number of merchants with a wider rollout expected in 2023.
While pay-by-bank is not necessarily something new to the industry, the JPMorgan-Mastercard partnership will offer a few wrinkles to the product.
“For our clients, it will minimise the risk of returns from an insufficient balance – through advanced analytics, we are creating a feature that will help clients determine the best time to initiate a payment,” said Max Neukirchen, head of payments and commerce solutions at JP Morgan Payments, in a statement
