JPMorgan connects corporate clients and retail customers with new real-time payment service

The news: JPMorgan launched request for pay, a service that lets corporate clients avoid card network payment processing and other third-party services by sending payment requests directly to the roughly 57 million retail customers who use the bank’s app or website, per Reuters.

Why it’s worth watching: Demand for faster payments became more pronounced during the pandemic—businesses and consumers needed to access their funds faster, and paper checks, cash, and other traditional payments weren’t cutting it.

That put a greater emphasis on faster payments and real-time payment (RTP) systems, leading to innovations that improved the end-to-end transaction process: In March 2021, Automated Clearing House (ACH) expanded same-day settlement so financial institutions (FIs) could send payments later in the business day. And the following month, five banks and three credit unions began testing the Federal Reserve’s FedNow RTP system, which will launch in the next few years.

JPMorgan was quick to get involved in faster payments: It was one of the first major US banks to connect to The Clearing House’s (TCH) RTP network in 2017. The new service reflects the bank’s desire to build a stronger presence in the space.

The opportunities: Request for pay is JPMorgan’s first proprietary RTP solution—here’s how the service can benefit the bank.

• The service can strengthen JPMorgan’s relationship with corporate clients. JPMorgan’s request for pay service helps corporate clients—especially those operating internationally—get paid faster and gives them a clearer picture of their businesses’ finances. It can also help keep their costs low by letting FIs avoid some fees affiliated with other transaction types. The real-time business-to-consumer sector (which request for pay falls under) remains largely untapped—putting JPMorgan at the forefront of the emerging space.
• It may also be extended to support other payment use cases. Since the service operates within JPMorgan’s client base, the bank could extend real-time options to other transactions—like B2B payments, which are expected to hit $27.542 trillion this year in the US alone, per Insider Intelligence forecasts. Expansion can help build out the bank’s wholesale payments division—the segment that includes RTP services—which currently contributes to 10% of its total revenues, according to Reuters.

Go deeper: We’ve barely begun to explore faster payments and RTP—to get a thorough breakdown of use cases, opportunities, and the future of the segment, check out our report, The Rise of Real-Time Payments.