Visa (NYSE:V) has announced that more companies in the United States are choosing Visa Direct to expand their real-time payment services. Visa Direct is a payments platform designed to allow financial institutions, developers and partners to offer secure real-time1 person-to-person (P2P) payments and business disbursements such as insurance claims payments, contractor payments, tax refunds and many other forms of business payment services.
“With Visa Direct, our clients and partners can greatly improve the way their customers can send and receive money – making their bank cards that much more valuable”
The Visa Direct platform has the ability to transfer funds within minutes to and from more than 200 million Visa debit cards in the United States. Visa can also transfer funds to and from non-Visa branded debit cards. Funds are transferred into the customer’s account linked to a debit card without the need for complicated deposit account number and routing code details.
Leading players are already using Visa Direct to offer a range of innovative real-time payment services – from mobile P2P payments between friends to business disbursements for sharing-economy services such as ride-sharing companies. For example, Early Warning, a company made up of leading financial institutions offering real-time payments, authentication and risk mitigation, will enable real-time P2P payments on its clearXchange network using U.S.-issued debit cards through the Visa Direct platform. Fiserv, the first company to leverage Visa Direct for P2P payments, is already offering Visa Direct as part of its Popmoney personal payments service. Additionally, last week PayPal and Visa announced that consumers will soon be able to instantly withdraw and move money from their PayPal and Venmo accounts to their bank account via their Visa debit cards leveraging Visa Direct – providing an experience that offers speed, security and convenience.
Early Warning, Fiserv and PayPal join a growing list of innovative companies or partnerships using Visa Direct which also includes Ingo Money and Square. Together, these partnerships represent significant progress in advancing the Federal Reserve’s stated goal to bring faster payments to consumers in the US.
“We’re always looking at ways we can deliver convenient, fast and secure payment solutions to meet our customers’ needs,” said David Godsman, head of emerging payments at Bank of America. “By working with Early Warning and Visa, we can offer consumers more choice and greater options for faster payments.”
“With Visa Direct, our clients and partners can greatly improve the way their customers can send and receive money – making their bank cards that much more valuable,” said Jack Forestell, senior vice president of global product, Visa Inc. “With the largest base of debit cards in the country and connections to non-Visa debit cards, Visa Direct provides an unmatched combination of ubiquity, cost-efficiency and speed for companies looking to offer real-time payments to anyone.”
In the U.S., the real-time “push” payments market segment has been estimated to be valued at more than $10 trillion, which includes approximately $1 trillion in P2P payments and $9 trillion in various forms of disbursements and contractor payments.2 Since the majority of these payments are currently made with cash, checks and through the Automated Clearing House (ACH), financial institutions and developers have a tremendous opportunity to digitize and ultimately improve the speed, convenience and security of sending and receiving these type of payments.
The Visa Direct platform is available in more than 200 markets around the world and can be potentially used to reach more than three billion consumer card accounts. Available through a comprehensive Visa Direct API library, financial institutions and technology partners can quickly build real-time payment solutions through a feature-rich suite of web services on the Visa Developer Platform.
1 Visa requires U.S. issuers to make funds available to its cardholders within a maximum of 30 minutes.
2 Year 2015 sizing is estimated to be $10.1 trillion derived from calculations compiled from the following sources:
- P2P $1.2T (source: Aite P2P Payments, Nov 2015)
- Non-P2P $8.9T
- B2C $6.1T (sources: Aite 2015 B2C Disbursements, Dec 2015; Bureau of Labor Statistics, Sept 2015; Government Accountability Office, Contingent Workforce Study, 2015; Morgan Stanley, Global Marketplace Lending May, 2015; Insurance Information Institute, 2014; Oxford Economics, 2014)
- G2C $1.8T (source: Aite 2015 B2C Disbursements, Dec 2015)
- B2B $1.0T (sources: Statista, Annual Retail Industry Sales, 2014; eMarketer, 2014; National Retailers Federation, 2014; Morgan Stanley, Global Marketplace Lending May, 2015)