Launched by J.P. Morgan Payments and Mastercard, ‘pay-by-bank’ is an ACH payment flow that employs open banking architecture. Open banking (data aggregation) allows the sharing of customer financial information between fintechs, billers, and financial institutions, offering quick, frictionless, and secure payments, without having to endure the tedious task of entering routing and account number every time a consumer needs to move money. It helps facilitate consumer onboarding for billers and fintechs, and lowers the risk of having account information exposed. It’s the underlying technology behind the EU’s PSD2 initiative. That JP Morgan and Mastercard are partnering on pay-by-bank puts them in position to better compete with existing providers MX, Plaid, and Yapily.
J.P. Morgan and Mastercard Modernize Account-Based Payments with Innovative ‘pay-by-bank’ Solution