Robinhood Taps JPMorgan to Process Transactions

The free-trading app is now valued at $11.7 billion after a record-setting 2021 Q1.

Need to Know

  • Robinhood announced it is now using JPMorgan to process transactions for cash management accounts.
  • The news comes as Robinhood, the free-trading app, prepares to make an IPO, likely in Q2 of 2021.
  • Robinhood had previously used Sutton Bank, an Ohio-based community lender with just eight branches.
  • Robinhood, which generated a record-setting $331 million in payments during the first three months of 2021, is valued at $11.7 billion.


In an email to customers, Robinhood revealed it is now using investment bank JPMorgan to process its transactions.

Robinhood, the free-trading app, has switched to JPMorgan from Sutton Bank, an Ohio-based community lender that has just eight branches. JPMorgan meanwhile is the biggest US bank by assets.

In its email to customers, Robinhood said the move to JPMorgan “is part of a larger effort to make a more consistent and reliable experience, and it will enhance our ability to meet your cash management needs.” The switch comes as Robinhood prepares to roll out an IPO, which the app is likely to make in the second quarter of this year.

Robinhood’s IPO timing — and the timing of its switch from community lender to massive US bank — comes on the heels of rapid user growth for the app, driven part by a surge in “meme stocks” buyers earlier this year.

The company now currently counts 13 million users and generated $331 million in payments during the first three months of 2021. Robinhood is currently valued at $11.7 billion, but according to Bloomberg, trading of private shares indicates the company could be valued as high as $40 billion in its upcoming IPO.

While JPMorgan provides processing services to Robinhood, the bank remains one of Robinhood’s competitors, as it also offers unlimited free trades via its mobile app.

The choice of JPMorgan for Robinhood adds another strong partnership to the investment bank’s roster of digital-first tools and innovations, demonstrating JPMorgan’s commitment to tech-driven competitiveness. The bank launched a blockchain unit as well as its own cryptocurrency, JPCoin, in October of last year, the same month it introduced an innovative new program that allows businesses to exchange loyalty points for standardized currencies. And in January, JPMorgan made a $100 million investment in Figure, a fintech-focused on blockchain mortgages and QR code payments.