Pay-by-bank capabilities – which let consumers pay bills directly from their bank accounts without having to type in routing or account numbers – reduces risks and costs for merchants and can earn goodwill from consumers.
Mastercard and JPMorgan just announced a new pay-by-bank product to let consumers pay bills directly from their bank accounts with great security and ease.
JPMorgan’s business customers benefit because pay-by-bank nixes credit card swipe fees and reduces their risk.
“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,” JPMorgan’s head of payments, Max Neukirchen, said in the press release.
Consumers, meanwhile, have an easy, instant, and secure way to pay, without relying on credit. “Digital acceleration has changed how people think about money and what they expect from everyday transactions,” a Mastercard spokesperson told Insights Distilled, citing those consumer expectations and technology innovation as drivers of open banking capabilities, including pay-by-bank.
JPMorgan and Mastercard are piloting pay-by-bank with a small number of US-based billers and merchants this year and expect to expand in 2023.