JPMorgan Chase Expands Services to Small Businesses, Teams Up with Gusto for Digital Payroll Processing

JPMorgan Chase, America’s largest bank by assets, is ramping up its efforts to cater to small business customers by introducing digital payroll processing, according to recent news from CNBC.

To power this initiative, the bank has partnered with San Francisco-based fintech firm Gusto, which will provide the underlying technology for this new feature. The move is seen as a strategic step by JPMorgan Chase to remain competitive in the evolving financial services landscape, where fintech giants like Square and PayPal are expanding their offerings to encompass a wide range of financial solutions, including payroll services.

Gusto CEO Josh Reeves commented on the partnership, stating, «If you’re a customer of Chase payments solutions, you can go to payroll from the same exact place you do banking. 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.»

JPMorgan Chase has been actively investing billions of dollars into technology in recent years, as traditional banks face increasing competition from fintech disruptors. This move into digital payroll processing aligns with the bank’s broader strategy to retain and expand its customer base.

While JPMorgan Chase has previously introduced fintech features like a Square-like credit card reader for small businesses and early direct deposit for consumers, its decision to partner with Gusto for payroll services is driven by the complexity of the payroll sector. Payroll processing involves nuances that vary from state to state, city to city, and county to county, making it a challenging area for banks to navigate independently.

By teaming up with Gusto, JPMorgan Chase aims to expedite its time-to-market for this new service, with a planned launch by the end of 2024. The service will offer capabilities such as disbursing salaries to employees, generating tax documents and pay stubs, and filing with local and national agencies.

As of now, JPMorgan Chase boasts a customer base of 5 million small businesses and more than 200,000 users of its payments solutions. In contrast, Gusto, founded in 2011, serves approximately 300,000 small and medium-sized businesses and was last valued at $9.6 billion. The startup competes with both traditional and newer providers in the payroll industry, including ADP, Intuit, Paychex, and Rippling.

In a rapidly evolving financial landscape, JPMorgan Chase’s partnership with Gusto signifies its commitment to offering comprehensive financial solutions for small businesses, aligning itself to better compete with fintech giants like Square and PayPal. With the introduction of digital payroll processing, the bank aims to provide a seamless experience for its customers, reinforcing its position in the market.