is stepping up its appeal to small business customers by planning to offer digital payroll processing, CNBC has learned.

The bank has picked San Francisco-based fintech player to provide the underlying technology for the feature, according to Gusto CEO .

"If you're a customer of Chase payments solutions, you can go to payroll from the same exact place you do banking," Reeves said. "It's the same experience, with the same login and credentialing; all that stuff becomes easier when it's in a one stop shop-type environment."

JPMorgan, the biggest U.S. bank by assets, has poured of dollars into technology in recent years. It's part of a larger battle for the loyalty of American retail and business customers as fintech players including and morph into do-everything providers that threaten traditional banks. Square offers services, while PayPal's venture arm has taken stakes in payroll service providers.

JPMorgan has previously rolled out fintech features, including a Square-like for small businesses and early for consumers.

When it came to payroll services — a universal chore for small business owners, some of whom still use paper checks to pay workers — JPMorgan decided to partner with Gusto rather than build its own solution.

That's because there are nuances to individual states, cities and counties that make the sector difficult to crack, according to Reeves.

Using Gusto will help JPMorgan speed its time to market for this service, which will go live by the end of 2024, according to a person with knowledge of the situation. The offering will disburse salaries to employees, generate tax documents and pay stubs, and file to local and national agencies.

JPMorgan has small business customers and more than 200,000 users of its payments-solutions offering, according to the person.

Gusto was founded in 2011 and serves 300,000 small and medium businesses. It was last valued at $9.6 billion. The startup competes with traditional and newer providers including ADP, Intuit, Paychex and Rippling.

–CNBC's contributed to this article.