Visa Brings P2P Payments to U.S. Cards Via Fiserv And CashEdge

Visa Inc. on Wednesday said it is adding person-to-person payment capabilities to its network and cards so that all Visa-branded credit, debit, and prepaid cards from U.S. issuers would be able to receive P2P payments. The first P2P providers to walk through Visa's new door were bank processor Fiserv Inc. and CashEdge Inc., both of which will have access to the VisaNet network so that their respective ZashPay and Popmoney products could be used to send money to Visa cardholders later this year.

Visa already enables personal payments to its branded cards in other countries through more than 70 programs offered by financial institutions, but only now is the capability coming to the U.S. “For fifty years, Visa has worked to simplify payments at the merchant point of sale; we are now evolving our network capability to make it easier for our account holders to pay one another,” Jim McCarthy, global head of products at Visa, said in a statement. “Through our agreements with Fiserv and CashEdge, we can accelerate the delivery of new and innovative Visa payments services, and better enable financial institutions to extend these services to customers.”

New York City-based CashEdge's agreement with Visa opens yet another routing option and facilitates international transactions to payment cards, a service many customers want, according to Neil Platt, senior vice president and general manager of U.S. banking “Right away it will allow Popmoney payments, which right now you can only send domestically, to be sent internationally,” Platt tells Digital Transactions News. “A lot of banks are really interested in that.”

Earlier this year, CashEdge announced an agreement with the NYCE Payments Network LLC that enables Popmoney transactions to go over NYCE's electronic funds transfer rails, accelerating the speed of the transaction up to real time. Most Popmoney transactions use the automated clearing house network, which can take up to two days to settle. Platt says it will be up to Popmoney's nearly 200 financial-institution customers to decide how they want to offer Popmoney's growing network options to customers.

Leading bank processor Fiserv said it has 700 financial institutions signed up to offer ZashPay, and the service already is live at 500. “Working with Visa allows us to deliver payments to even more consumers more quickly and deepens the relationship that member financial institutions have with their customers,” Erich Litch, division president of digital channels at Brookfield, Wis.-based Fiserv, said in a statement. “We're committed to making the ZashPay network the largest and fastest personal-payment network, providing the convenience and speed that financial institutions, consumers, and small businesses demand in order to drive adoption and usage.”

With both ZashPay and Popmoney, a customer of a bank or credit union offering either service can go to his online-banking site to send money to a demand-deposit account. To send money to a Visa account using Popmoney, for example, the sender would need the card number. Popmoney also enables funds to be sent to e-mail accounts or cell-phone numbers. A recipient who receives funds through those two channels could forward the funds to his or her Visa card after inputting the card number, according to Platt. “We've simply created ways to receive funds on a Visa card in addition to a bank account,” he says.

The agreements with Fiserv and CashEdge give Visa an edge in the rapidly evolving person-to-person payments scene, but it may be temporary. CashEdge has more network agreements pending, according to Platt. “We do have more announcements in store,” he says without naming names.

Fiserv said it would first concentrate on linking ZashPay with Visa credit and debit cards, with prepaid cards and international transfers to be added later. Fiserv also said it would offer real-time capabilities to ZashPay later this year, presumably by routing transactions over the Fiserv-owned Accel/Exchange EFT network.

Enabling cards to accept P2P payments will require some operational changes by issuers, which are to be completed by 2011's second half.