J.P. Morgan announced today that it has been designated by the United States Treasury Department under a financial agency agreement to provide account validation services for federal government agencies.
The program was awarded to J.P. Morgan after a competitive selection process and will extend for a minimum of five years.
The agreement with J.P. Morgan reflects the important role that account validation plays in Treasury’s commitment to payment integrity and the reduction of improper payments. In fiscal year 2022, Fiscal Service disbursed nearly 1.4 billion payments for federal agencies totaling $5.27 trillion, including 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 $247 billion in improper payments during the 2022 fiscal year, according to the U.S. Government Accountability Office. This includes overpayments, underpayments and payments that should not have been made.
“It is an honor to be selected to provide account validation services to the U.S. federal government agencies,” said Takis Georgakopoulos, J.P. Morgan’s Global Head of Payments. “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.”
In its new role, J.P. Morgan will verify critical payment information for the federal government before payments are issued. The bank’s advanced technology will verify payment details using its extensive network of secure customer information as well as industry data that the bank regularly accesses for payment processing. The bank already moves on average 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 J.P. Morgan’s latest assignment for the Treasury Department. The bank has taken on different roles in recent years, advising Treasury as it digitizes its payment systems and modernizes its operations to pay and receive money from citizens and businesses more efficiently.