JPMorgan Chase gives early payday deposits to Secure Banking customers

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 a no-overdraft checking account.

The bank is debuting this feature — which accelerates 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.

That typically means getting paid on a Wednesday rather than a Friday, he said.

“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, the biggest U.S. bank by assets, is taking this step as the industry faces rising pressure from regulators and lawmakers on overdraft and other fees. While smaller rivals including Capital One have said they are dropping overdraft fees, the CEOs of the three largest U.S. institutions have repeatedly refused calls to end the charges altogether.

Instead, banks have drawn attention to existing products that protect users from overdraft fees, while still 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 targeted to households that earn around $55,000 or less a year, has about 1.4 million users, MacDonald said. Most customers have direct deposit and will automatically begin receiving early payments, he added.

The bank, which says it serves more than 66 million U.S. households overall, can be a “fast follower” of fintech rivals when they create must-have features, MacDonald said. Start-ups including Chime and Current have popularized early direct deposits as they’ve 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 payment before some of these players came in. As we evaluated it, we think that there’s a real need for certain customers to have this.”

Unlike the newer, app-reliant 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 on introducing other solutions for this group, including small loans or installment products, to help users smooth out their financial needs when emergencies arise, he added.