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Enrolling PayPal and Venmo into the Visa+ interoperable peer-to-peer payments system may help foster even more P2P transactions, an analyst says.
Visa Inc. earlier this week announced the two P2P wallets from PayPal Holdings Inc. had been enabled in the United States for Visa+. Users can sign up for a Visa+ payname, which is associated with a receive-only Visa token stored by Visa and linked to the user’s wallet account, says Vikram Modi, head of Visa+. Visa announced Visa+ in 2023.
“The sender can enter the recipient’s Visa+ payname in their participating wallet app and submit the payment. Visa+ paynames provide privacy to consumers; there is no need to share emails, phone numbers, or other account details with other users to receive funds,” Modi tells Digital Transactions News via email. “This allows them to receive and send payments across different participating apps quickly and securely.”
Currently, eligible users send or receive funds across the two platforms, he says. Fintech Current and The Western Union Co. are expected to enable Visa+ next. Western Union said in 2023 that it viewed Visa+ as a complement. “The Visa+ product offer is consistent with how we’ve constructed and managed our business,” Western Union chief executive Devin McGranahan told analysts during an earnings call then, according to a SeekingAlpha.com transcript. “And with the addition of a digital wallet in the U.S., it seemed to make a lot of sense.”
Enabling a cross-application P2P payment function makes sense, says Ariana-Michele Moore, a retail-banking and payments advisor at consultancy Datos Insights.
“It helps address the classic conundrum of payment acceptance: how do you get receiving parties to sign on when you don’t have strong sender adoption and vice versa,” Moore tells Digital Transactions News.
“I cover P2P payments, and currently don’t see a strong demand on the consumer side. I say this because existing P2P payment providers already have a household name,” Moore adds. “Why would consumers want to download yet another app and come up with yet another username? PayPal and Venmo already have a strong user base.”
Datos estimates PayPal is used by at least 75% of consumers making P2P payments; for Venmo, it’s 55%.
“I liken the P2P payment experience to the early days of card acceptance. If a merchant didn’t take Discover, you’d pull out your [Mastercard] or Visa card,” says Moore. “Today, folks say ‘If you don’t have Venmo, I can also do CashApp.’ Point being, many consumers have multiple payment apps on their phones.”
Consumer pricing for the service is determined by wallets and merchant partners, Modi says, while adding Visa does not publicly disclose its pricing for any Visa products or services.
