US Treasury Department enlists JP Morgan for account validation services
JP Morgan has signed a five-year deal with the US Treasury Department to provide account validation services for federal government agencies.
US Treasury taps JP Morgan for account validation
As part of the agreement, JP Morgan’s corporate and investment bank will corroborate payment information for the department’s fiscal service prior to its payments being issued. It will seek to authenticate payment details by leveraging its own customer information alongside industry data it claims to regularly utilise within its own payment processing agenda.
The Treasury estimates that it dispersed close to $5.27 trillion to federal agencies during the fiscal year for 2022, typically to fund initiatives including social security, medicare, tax refunds and unemployment insurance. However, according to the figures of the US Government Accountability Office, $247 billion of this figure fell under the scope of what it describes as “improper payments”, where payees were either overpaid, underpaid or received a payment that should not have been made at all.
Claiming to facilitate the movement of $9 trillion every day while simultaneously making “significant investments in real-time payments”, JP Morgan has been designated by the Treasury to eradicate its financial losses through account validation, and thus close the gap on the trend of improper payments that it says erodes public trust in government services.
Speaking on the deal, Takis Georgakopoulos, JP Morgan’s global head of payments, describes it as “a significant testament to our capabilities” and anticipates that the service will “help to provide money to Americans faster, safer and more accurately while also saving taxpayer dollars”.
The bank’s latest assignment builds on its existing relationship with the US Treasury Department, which to date, has most notably assisted the department in its pursuit of digital payment systems and operational modernisation.
