JP Morgan has been designated by the United States Treasury Department to provide account validation services for federal government agencies. The program was awarded to J.P. Morgan after a competitive selection process and will last for a minimum of five years.
The agreement reflects the important role that account validation plays in the Treasury’s commitment to payment integrity and the reduction of improper payments. In the fiscal year 2022, fiscal service disbursed nearly 1.4 billion payments for federal agencies. This totalled $5.27 trillion and included social security and medicare payments, unemployment insurance and tax refunds.
Improper payments due to fraud or clerical errors can delay the delivery of critical funds to rightful recipients, lead to financial losses, and erode public trust in government services. The federal government reported an estimated $247bn in improper payments during the 2022 fiscal year, according to the US Government accountability office. This includes overpayments, underpayments and payments that should not have been made.
Takis Georgakopoulos, JP Morgan’s Global Head of Payments, said: “It is an honour to be selected to provide account validation services to the US 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.”
The role JP Morgan will play
In this role, JP Morgan will verify critical payment information for the federal government before payments are issued. The bank’s technology will verify payment details using its network of secure customer information as well as industry data that the bank regularly accesses for payment processing. The bank already moves more than $9 trillion each day, and has made significant investments in real-time payments and other secure payments technology in recent years.
Account validation is JP Morgan’s latest assignment for the Treasury Department. The bank has taken on different roles in recent years, advising the Treasury as it digitises its payment systems and modernises its operations to pay and receive money from citizens and businesses more efficiently.
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