In an effort to enhance its services for small business clients, JPMorgan Chase plans to introduce digital payroll processing. The banking giant has partnered with San Francisco-based fintech firm Gusto, selecting their technology to underpin this new feature, as confirmed by Gusto CEO Josh Reeves. Reeves explained, “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 environment.” Being the largest U.S. bank by assets, JPMorgan Chase has made significant investments in technology in recent years, marking its strategy to compete for the loyalty of American retail and business customers. The rise of fintech players like PayPal and Square, evolving into comprehensive service providers, has posed a challenge to traditional banks. Square, for instance, already offers payroll services, and PayPal’s venture arm has invested in payroll service providers.

JPMorgan has previously introduced various fintech features, including a Square-like credit card reader for small businesses and early direct deposit for consumers. When venturing into payroll services, a fundamental need for small business owners, some of whom still rely on paper checks for payments, JPMorgan opted to collaborate with Gusto rather than develop an in-house solution. This decision was influenced by the intricate regulatory landscape varying across states, cities, and counties, making the sector challenging to navigate, according to Reeves. The adoption of Gusto’s technology will enable JPMorgan to expedite the time to market for this new service, set to be operational by the end of 2024. The offering will facilitate employee salary disbursements, generate tax documents and pay stubs, and handle filings with local and national agencies. JPMorgan boasts a customer base of 5 million small businesses and over 200,000 users of its payment solutions offering. Gusto, founded in 2011, serves approximately 300,000 small and medium-sized businesses. The startup, valued at $9.6 billion, competes with traditional and newer providers in the payroll services sector, such as ADP, Intuit, Paychex, and Rippling.