JPMorgan Chase provides early payday deposits to Secure Banking customers

JPMorgan Chase gives some customers early access to their direct deposits, a feature popularized by fintech rivals as it hopes to attract users to an overdraft-free checking account.

The bank is turning on this feature — which accelerates payments including wages, tax refunds, pensions and government benefits by up to two days — to customers with its Secure Banking product starting this week, according to Ryan MacDonald, head of growth financial products for Chase.

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

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

JPMorgan, the largest U.S. bank by assets, is taking the step as the industry faces growing pressure from regulators and lawmakers on overdraft and other fees. While smaller rivals included Capital one have said they are dropping overdraft fees, CEOs of the three largest US institutions have repeatedly rejected talks to end the fees altogether.

Instead, banks have drawn attention to existing products that protect users from overdraft fees while offering 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. The service, which is aimed at households making about $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 U.S. households overall, could be a “fast follower” of fintech rivals in creating must-have features, MacDonald said. Start-ups including Chime and Current have popularized early direct deposits as they have gained millions of cost-conscious users.

“The fintechs are doing a good job of entering the space and trying to disrupt by offering services,” MacDonald said. “Customers didn’t even think about early access to payments until some of these players came in. As we evaluated it, we think there’s a real need for some customers to have this.”

Unlike the newer, app-dependent players, however, JPMorgan’s value proposition includes both digital services and a broad 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 users smooth out their financial needs when emergencies arise, he added.