Per the announcement information, the programme was awarded to J.P. Morgan following a competitive selection process and is set to extend for a minimum of five years.
The agreement with J.P. Morgan comes as a reflection of the important role that account validation plays in the Treasury’s commitment to payment integrity and the reduction of improper payments. Within the 2022 fiscal year, Fiscal Service disbursed approximately 1.4 billion payments for federal agencies amounting to a total of USD 5.27 trillion, including Social Security and Medicare payments, unemployment insurance, and tax refunds.
Improper payments caused by 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. According to the US Government Accountability Office, the federal government reported an estimated USD 247 billion in improper payments, which includes overpayments, underpayments, and payments that should not have been carried out.
In this new role, J.P. Morgan is going to verify critical payment information for the federal government before payments are issued. Based on the press release information, the bank’s advanced technology will help verify payment details leveraging its extensive network of secure customer information as well as industry data that the bank regularly accesses for payment processing. The bank currently moves on average more than USD 9 trillion on a daily basis and has made significant investments in real-time payments and other secure payment technology in the past years.
What is more, account validation comes as J.P. Morgan’s most recent assignment for the Treasury Department, as the bank has taken on different roles in recent years, providing advice to the Treasury as it digitises its payment systems and modernises its operations to pay and receive money from citizens and businesses alike in an increasingly efficient manner.
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