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Visa Inc.’s move to speed up its Visa Direct service to no more than one minute, starting in April, is likely to cement the global card network’s place in the payments industry’s steady movement toward real-time transfers, some observers say.
The network, which announced the move early Thursday, says it will represent even faster service for a business-to-business, business-to-consumer, and peer-to-peer payments service it launched 11 years ago and that generated 9.5 billion transactions in the year ended Sept. 30.
Visa Direct transactions have typically been completed in 30 minutes or less, though recent tests have indicated 90% of transactions are posted in less than a minute, and 97% are posted in less than two minutes, according to an email from a Visa spokesperson. Funds are deposited to bank accounts connected to eligible debit cards.
“The rule change will ensure that the entire ecosystem works towards a post time that delivers on the real-time expectations of consumers,” the spokesperson adds. He says issuers and processors were informed of the move in September to allow time for system changes.
A dramatically faster Visa Direct service comes as networks such as the Federal Reserve’s year-old FedNow system, along with a competing platform launched seven years ago by some of the nations biggest banks, have raised awareness among businesses and consumers about real-time payments availability.
“Doing [transfers] in one minute really does make [Visa] a participant in the instant-payments movement,” notes Steve Mott, proprietor of payments consultancy Better Buy Design. “They’ve moved into this sector in a material way.”
Mastercard Inc.. which offers a competing service called Mastercard Send, did not immediately respond to a request for comment on Visa’s move.
Visa in its announcement cites a broad range of consumer applications for the speeded-up service, including splitting bills with friends, receiving insurance payouts, and earned-wage access. The network, which does not disclose U.S. volume figures for Visa Direct, says the service accesses 99% of U.S. bank accounts, along with more than 11 billion “endpoints” globally, including cards, accounts, and digital wallets.
The dccision to speed up what was already a reasonably quick payments service indicates Visa’s determination to make sure its core product can compete with real-time money-movement systems, Mott says. “They’re not going to be left behind on cards,” he notes.
