JPMorgan Chase (NYSE:JPM) 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 switching on this feature — which accelerates payments including payroll, tax refunds, pensions and government benefits by up to two days — to 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 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.
JPM shares began mid-week session down 22 cents to $118.62.
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