JPMorgan Chase will offer small and medium businesses embedded payroll services powered by Gusto, Tomer London, co-founder and chief product officer of Gusto, said in a company blog post last week.
Chase Payment Solutions will use Gusto Embedded — an application programming interface customized for any business software platform to combine payments, banking and payroll, with a single sign-in via chase.com, he said.
Chase Payment Solutions’ payroll offering powered by Gusto Embedded, would help to simplify the process of running payroll, calculating and withholding taxes, filing with the right agencies and creating employee paystubs, according to London. The employees of Chase Payment Solutions' customers can self-onboard, access paystubs, and pull tax documents via a secure company portal. The combination of payroll process and financial operations is aimed to save business owners time, he noted.
“There is a big trend underway, I think with more companies focused on small business that's a wonderful thing — a segment that's been underserved for a long time,” Gusto CEO Josh Reeves told CNBC. “So the way this works, is basically a partner like Chase payment solutions can now broaden their offering. They can launch their own payroll product powered by Gusto. And the reason why we're excited about this is it enables us to reach more small and medium sized businesses.”
Payroll is not just about money movement but also about tax rules and compliance, Reeves explained. There are rules at the county, city and state levels apart from those the IRS has in place. This is coupled with documentation, filings and reporting, which small businesses typically do by hand, leading to mistakes and consequent fines.
Using modern technology and software can help minimize these problems, Reeves said.
Gusto serves over 300,000 small and medium-size businesses across the U.S. While Gusto Embedded, which enables bank, vertical SaaS and fintech partners to leverage Gusto's payroll API and embed payroll directly into their platforms, currently serves dozens of partners that serve more than 500,000 businesses collectively.
The fintech’s partners using Gusto Embedded can launch their payroll products without having to build them from scratch, Reeves pointed out.
Gusto Embedded was introduced in 2021.
Over the past decade, Gusto has processed over two-thirds of a trillion dollars in payroll for several employers across the country, according to London. Gusto acquired Symmetry Software in 2021, a technology firm that calculates payroll taxes for companies of all sizes to offer advanced payroll infrastructure faster.
"We have been exploring ways to introduce best-in-class payroll services to our SMB customers," Jessica Young, managing director and head of product at Chase Payment Solutions, said in a statement. "Building payroll at national scale requires deep knowledge and understanding. With Gusto Embedded, we are able to decrease the time to offer a leading payroll service while increasing the value we're able to deliver to our customers."
The regional bank failures did not impact Gusto's payroll operations this spring, London noted. The fintech's redundancy banking system, which has been used for years, helps keep the payroll running in case a banking partner faces any disruption.
"We created Gusto Embedded for companies like Chase that are committed to helping small businesses be successful — and continuing to innovate to deliver on that commitment. We want to make it easy for companies to access the best and most reliable payroll solutions so they can help their customers' businesses grow, as well as their own,” London said in the blog post.