JPMorgan Chase & Co (NYSE: JPM) has been named the official account validator for the U.S. Treasury Department for the next five years.
What Happened: A competitive selection process ended with the Treasury's choosing of New York-based investment bank JPMorgan Chase to provide account validation services to federal government agencies.
The contract will extend for a minimum of five years.
"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," J.P. Morgan's Global Head of Payments Takis Georgakopoulos commented.
The bank says it will utilize its extensive network to verify critical payment information for the federal government before issuing the payments.
JPMorgan, which boasts of an average of more than $9 trillion in daily movement, has made notable investments in real-time payments and other secure payment technology.
Why It Matters: Account validation plays an important role in Treasury's efforts to ensure payment integrity and the reduction of improper payments caused due to fraud or clerical errors. In 2022, Fiscal Service disbursed almost 1.4 billion payments for federal agencies worth more than $5.2 trillion. It included Social Security and Medicare payments, unemployment insurance, and tax refunds.
Meanwhile, the federal government saw an estimated $247 billion in improper payments during the same year which included overpayments, underpayments, and payments that should not have been made.