JPMorgan Chase, Taking a Feature From Fintech Rivals, Gives Some Customers Early Payday Deposits

As part of its efforts to attract customers to its no-overdraft checking account, JPMorgan Chase is giving some clients early access to their direct deposits, a feature popularized by fintech competitors. According to Ryan MacDonald, Chase’s head of growth financial products, the bank will introduce this feature, accelerating payroll, tax refunds, pensions, and government benefits up to two days for customers of its Secure Banking product beginning this week. He said that typically means getting paid on a Wednesday rather than a Friday. “Those couple days are often the difference between looking for money from family or not paying that bill on time and getting charged a late fee,” MacDonald said in an interview.

JPMorgan Chase, the largest bank by assets in the United States, is taking this step in response to increasing pressure from regulators and legislators on overdraft fees. Despite smaller competitors such as Capital One announcing they will cease charging overdraft fees, the CEOs of the three largest U.S. institutions have repeatedly refused to do so. The banks have instead focused attention on existing products that protect consumers from overdraft fees while still providing most of the functionality of full-service accounts. For JPMorgan, that product is Secure Banking, which has no minimum balance requirement and costs $4.95 a month. MacDonald said that the service targets households earning around $55,000 or less a year and has about 1.4 million users. He added that most customers have direct deposit and will automatically begin receiving early payments. MacDonald believes that the bank, which serves over 66 million U.S. households overall, can be a “fast follower” of fintech competitors when they create features that will be essential to consumers. Many startups, including Chime and Current, have gained millions of users by offering early direct deposits.