JPMorgan Chase is going to offer digital payroll processing to entice more small company clients. The feature’s technology, according to Gusto CEO Josh Reeves, will come from the San Francisco financial company.
“If you’re a customer of Chase payments solutions, you can go to payroll from the same exact place you do banking,” Reeves said. “It’s the same experience, with the same login and credentialing; all that stuff becomes easier when it’s in a one stop shop-type environment.”
In recent years, JPMorgan, the largest U.S. bank by assets, has invested billions of dollars in technology. This is just one front in the bigger war between traditional banks and fintech companies like PayPal and Square, which are becoming one-stop shops for a growing number of banking services. Both organizations handle payroll in-house.
A Square-like credit card reader for small businesses and early direct deposit for individuals are just two examples of the fintech products that JPMorgan has pushed out in the past.
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JPMorgan decided to cooperate with Gusto rather than develop its own payroll service because it is a ubiquitous chore for small business owners, some of whom still use paper checks to pay employees. Gusto, as a fintech partner, can handle the complexities of providing payroll services on a nationwide scale. According to Reeves, the sector is complicated by the differences across states, cities, and counties.
According to a source familiar with the matter, JPMorgan will be able to bring this solution to market more quickly with the help of Gusto, and it will launch by the end of 2024. Salary payments to workers, as well as related tax and W-2 forms, W-2s, and filings to state and federal governments, will all be handled by the offering.
The person claims that JPMorgan has 5 million SMB clients and over 200,000 users of their payments-solutions service. Gusto was established in 2011 and has since assisted 300,000 small and medium sized enterprises. Its previous price tag was $9.6 billion. The company faces competition from both established and up-and-coming rivals like ADP, Intuit, Paychex, and Rippling.
