US-based investment banking company JP Morgan has been selected by the US Treasury Department, to provide account validation services for federal government agencies.
The US Treasury Department signed a financial agency agreement with JP Morgan, after a competitive selection process, which will extend for a minimum of five years.
Under the terms of the agreement, JP Morgan will verify critical payment information for the federal government before payments are issued.
The bank will leverage its advanced technology to verify payment details using its broad network of secure customer information, along with industry data used for payment processing.
JP Morgan global payments head Takis Georgakopoulos said: “It is an honour to be selected to provide account validation services to the U.S. federal government agencies.
“This is a significant testament to our capabilities and it is particularly gratifying that this work will help to provide money to Americans faster, safer, and more accurately while also saving taxpayer dollars.”
Last year, the US government disbursed a total of $5.27tr in payments to federal agencies, including Social Security and Medicare payments, unemployment insurance, and tax refunds.
Improper payments due to fraud or clerical errors may delay the delivery of funds to due recipients, leading to financial losses and loss of public trust in government.
According to the US Government Accountability Office, the federal government reported an estimated $247bn in improper payments in the fiscal year 2022.
The improper payments include overpayments, underpayments, and undesired payments.
JP Morgan said that it enables more than $9tr in payments each day and has made significant investments in real-time payments and other secure payment technology, recently.
The bank has been supporting the Treasury Department in different roles, including digitising its payment systems and upgrading its operations to enhance transactions.
Last month, JP Morgan Payments introduced the Tap to Pay on iPhone service for merchants in the US, with Sephora, a personal care and beauty products retailer, as the first client.
