Co-founders Eddie Kim, Josh Reeves and Tomer London of fintech startup Gusto, which provides payroll services for small businesses.
Courtesy of Kelly Boynton | gusto
JPMorgan Chase is increasing its appeal to small business customers by planning to offer digital payroll, CNBC has learned.
According to Gusto CEO Josh Reeves, the bank has selected San Francisco-based fintech provider Gusto to provide the underlying technology for the feature.
“If you’re a customer of Chase’s payment solutions, you can access payroll in the exact same place you bank,” Reeves said. “It’s the same experience, with the same login and credentials; all of these things become easier when it takes place in a one-stop-shop type environment.”
JPMorgan, the largest U.S. bank by assets, has poured billions of dollars into technology in recent years. It’s part of a larger battle for the loyalty of American personal and business customers as fintech players like PayPal and Square become jack-of-all-trades that threaten traditional banks. Both companies have their own payroll services.
JPMorgan has already launched fintech features, including a Square-like credit card reader for small businesses and early direct deposit for consumers.
Everyone has to be paid
When it came to payroll services — a common task for small business owners, some of whom still use paper checks to pay their workers — JPMorgan chose to partner with Gusto rather than develop its own solution.
A fintech partner like Gusto is better able to handle the complexities of offering payroll services across the country. Reeves says there are nuances within individual states, cities and counties that make the sector difficult to crack.
The use of Gusto will help JPMorgan accelerate the rollout of this service, which will be operational by the end of 2024, according to a person familiar with the situation. As part of the offering, salaries are paid to employees, tax documents and payslips are prepared and submitted to local and national authorities.
According to the person, JPMorgan has 5 million small business customers and more than 200,000 users of its payment solutions offering.
Founded in 2011, Gusto serves 300,000 small and medium-sized businesses. The most recent value was $9.6 billion. The startup competes with traditional and newer providers such as ADP, Intuit, Paychex and Rippling.
–CNBC’s Jon Fort contributed to this article.
Source : www.cnbc.com