Co-founders Eddie Kim, Josh Reeves, and Tomer London of fintech startup Gusto, which handles payroll services for small businesses.
Courtesy: Kelly Boynton | Gusto
JPMorgan Chase is stepping up its appeal to small business customers by planning to offer digital payroll processing, CNBC has learned.
The bank has picked San Francisco-based fintech player Gusto to provide the underlying technology for the feature, according to Gusto CEO Josh Reeves.
“If you’re a customer of Chase payments solutions, you can go to payroll from the same exact place you do banking,” Reeves said. It’s the exact same experience with the same login credentials and all of that becomes easier in an environment like a one-stop shop. “
JPMorgan has invested billions in technology over the past few years. It’s part of a larger battle for the loyalty of American retail and business customers as fintech players including PayPal and Square morph into do-everything providers that threaten traditional banks. Both companies have their own payroll services.
JPMorgan has previously rolled out fintech features, including a Square-like credit card reader for small businesses and early direct deposit for consumers.
Everyone needs to get paid
When it came to payroll services — a universal chore for small business owners, some of whom still use paper checks to pay workers — JPMorgan decided to partner with Gusto rather than build its own solution.
A fintech partner like Gusto is better able to manage the complexity of offering payroll services nationally. Reeves says that the sector is difficult to crack because of its nuances in different states, counties, and cities. The offering will disburse salaries to employees, generate tax documents and pay stubs, and file to local and national agencies.
JPMorgan has 5 million small business customers and more than 200,000 users of its payments-solutions offering, according to the person.
Gusto was founded in 2011 and serves 300,000 small and medium businesses. The startup was valued at $9.6billion last year. The startup competes with traditional and newer providers including ADP, Intuit, Paychex and Rippling.
Jon Fortt contributed to this article.