With traditional payment methods like cash and personal checks on the decline, J.P. Morgan Payments is looking to tap into the growing interest in alternative payment methods by partnering with Mastercard on a new digital banking payment platform.
On Wednesday (Nov. 9), Mastercard said in a press release that the company has teamed up with J.P. Morgan Payments to develop Pay-by-Bank, an open banking ACH payment platform that has the potential for billers to take the pain out of recurring payments such as rent, utilities, payments to the government, tuition, insurance and health care payments by dealing with a person’s bank directly for payment.
Mastercard North America’s Executive Vice President of Merchants and Acceptance Chiro Aikat said of Pay-by-Bank, “billers and consumers both get greater payment choice, but the partnership also propels payments innovation on two fronts — in the ease of the user experience and in the security of data sharing.”
Both companies have agreed to start rolling out Pay-by-Bank with a small number of U.S.-based billers and merchants this year, with an expectation to expand the platform further in 2023.
In an August PYMNTS research report, “Bundled Banking Products: How Credit Cards Secure Customer Loyalty,” 27% of those polled without credit cards from their primary banks are also highly interested in receiving recommendations about the best payment methods for specific purchases.
With Mastercard’s Pay-by-Bank system, banks can now offer customers those alternative payment methods in a new, innovative and secure way.
Max Neukirchen, J.P. Morgan Payments’ head of payments and commerce solutions, said in the press release, “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.”
Mastercard also expanded its contactless payments capabilities at Sunday’s (Nov. 6) New York City Marathon. Runners in the race were given the opportunity to include a “Tap & Go” contactless payment chip that was preloaded with $10 adhered to their race identification number bib. These chips showcased how quick and easy it is to give people innovative payment options.