JPMorgan Chase, Taking a Feature from Fintech Rivals, Gives Some Customers Early Payday Deposits – NBC Los Angeles

• 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 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 from this week.
• That usually means getting paid on a Wednesday instead of Friday, he said.

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 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, including Capital One, have said they are dropping overdraft fees, CEOs of the three biggest US institutions have repeatedly rejected calls to end the charges 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 has about 1.4 million users, most of whom have direct deposits and will automatically start receiving early payments, MacDonald said.

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.”

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 said.