JPMorgan Chase provides early payday deposits to Secure Banking customers | Techy Kings


A sign outside a Chase bank branch in San Francisco, California, on Monday, July 12, 2021.

David Paul Morris | Bloomberg | Getty Images

JPMorgan Chase is giving some customers early access to their direct deposits, a feature popularized by fintech rivals, as it hopes to attract users to checking accounts without overdrafts.

The bank introduced the feature — which expedites payments including payroll, tax refunds, pensions and government benefits by up to two days — for customers of its Secure Banking product, starting this week, according to Ryan MacDonald, head of growth financial products for Chase.

This usually means getting paid on Wednesday instead of Friday, he said.

“Those few days are often the difference between finding money from the family or not paying the bill on time and being charged a late fee,” MacDonald said in an interview.

JPMorgan, the largest US bank by assets, took the move as the industry faces growing pressure from regulators and lawmakers over overdrafts and other fees. While smaller rivals include Capital One have said they will drop overdraft fees, the CEOs of the three largest US institutions have repeatedly rejected calls to end the charge altogether.

Instead, banks have drawn attention to existing products that protect consumers from overdraft fees, while still offering most of the functionality of a full-service account.

For JPMorgan, that product is Secure Banking, which has no minimum balance requirement and costs $4.95 a month. The service, which is targeted at households earning around $55,000 or less a year, has about 1.4 million users, MacDonald said. Most customers have direct deposit and will automatically start receiving early payments, he added.

The bank, which says it serves more than 66 million US households overall, could be a “fast follower” of fintech rivals when they create must-have features, MacDonald said. New companies including Chime and Current have popularized early direct deposit as they have acquired millions of cost-conscious users.

“Fintech is doing a good job of entering the space and trying to disrupt by offering services,” MacDonald said. “Customers just didn’t think about early access to payments before some of these players came in. As we evaluated it, we thought there was a real need for certain customers to have it.”

Unlike newer, app-dependent players, however, JPMorgan’s value proposition includes both digital services and a vast physical network of about 4,700 branches and 16,000 ATMs, the executive said.

The bank is working to introduce other solutions for this group, including small loans or installment products, to help consumers smooth their financial needs in the event of an emergency, he added.


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