The new service allows customers to pay bills automatically using their bank account information instead of a card
Provided by J.P. Morgan Payments and Mastercard, Pay-by-Bank is an ACH payment service that uses open banking. Now customers may permit their financial data to be shared seamlessly between trusted parties. This way, they can pay bills directly from their bank account without typing in routing and account numbers each time.
For billers and merchants, in their turn, the service automates consumer onboarding and reduces both risks and costs of storing bank account information. The offering will be specifically valuable for recurring payments.
Namely, ACH transactions are the primary medium of payment for rent, utilities, payments to the government, tuition, insurance, and health care. Such transactions account for trillions of dollars in volume each year.
Pay-by-Bank is currently tested in a pilot mode with a few US-based billers and merchants. The full expansion is expected next year.