Dive Brief:
- JPMorgan Chase is offering same-day deposits for customers who use its WePay platform. The bank said the service comes at no additional cost for merchants and small businesses that use the platform.
- The country's largest bank bought Silicon Valley-based startup WePay for an estimated $400 million in December 2017.
- The free, same-day service gives Chase an edge on fintech competitors, such as Stripe and Square, which charge fees for faster processing.
Dive Insight:
Chase's acquisition of WePay is proving a fruitful investment for the bank, as competition in the payments industry picks up steam.
WePay has unique leverage that sets it apart from competitors, the company's CEO, Bill Clerico, told CNBC on Tuesday.
"Because we are a bank [as well as a payments processor], we can deposit their credit-card proceeds the same day, including weekends, at no additional cost," Clerico said.
Other payment processors can take as long as 72 hours over a weekend to process a payment, he said.
Square and Stripe say payments take one to two business days to complete, and each charges a fee for faster service. Stripe charges 1% to make an instant payment, according to its website.
Fintech startups are finding ways to stand out in the increasingly competitive payments industry, even adding the same services offered by banks.
Square is pursuing a banking charter, a move that has received pushback from the trade group Independent Community Bankers of America.
Stripe announced last week that it entered the lending space. The company will focus on offering $10,000 to $20,000 loans to online businesses that are existing customers, and to merchants that sell on platforms such as Shopify, which processes payments through Stripe.
