JP Morgan beefs up small business payments with Bill.com

Jamie Dimon may think Bitcoin is a fraud, but it seems he’s still Ok for JP Morgan Chase to drop some ‘real’ money on other more mature fintech ideas in the B2B space.

Yesterday Bill.com announced JP Morgan Chase had made an undisclosed investment into its automated billing platform for small businesses.

Unlike C2C payments, where the likes of Venmo have made inroads – and now Zelle – the B2B sector is still relatively nascent, and little innovation can be found.

Today Bill.com allows its 2.5 million business customers to email or upload bills directly into its platform, initiate approval workflows if required, then authorize payment from the business’s bank account, removing any need to log in to a separate banking platform.

And for those businesses who’ve made it to the cloud, bill data can also be synced through to an accounting system, like Quickbooks or Xero, eliminating double handling.

What is interesting is that this workflow is essentially reversed here in Australia, and New Zealand. Here business owners typically upload invoices into their accounting platform first, then manually upload payment files to their bank, which is incredibly cumbersome. Very few banks offer automatic syncs between accounting platforms and banks for the purposes of initiating bill payments, making Bill.com a serious step ahead in terms of functionality.

Alongside its direct offering, Bill.com is building out a more comprehensive banking play, Bill.com Connect. The Connect platform launched in 2016, and has allowed Bill.com functionality to be effectively embedded inside a vanilla business-banking platform. One premise behind this is that it can help banks move a business from cheque to online payments. And not only does this offer the allure of reduced processing overheads, but it potentially presents another fee revenue stream.

Some research bodies suggest up to 50 percent of small business payments in the US are still being paid by cheque, however use is declining. But it is still significantly slower than many would like. According to the Bank of International Settlements, Americans make on average 38 cheque transactions each in 2015.

It’s not clear if Chase will use Connect or will develop a more customized solution for their customers, however the functionality will live inside Chase’s platform, with the potential to reach the bank’s 4 million small business customers. No doubt Chase are hoping it will win them some more too.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business.

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