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Fiserv Inc. on Wednesday announced it is adding a capability to its Popmoney person-to-person payment service that will let users send money within seconds to intended recipients. The new feature, called Popmoney Instant Payments, relies on debit-network clearing and comes as more and more processors are harnessing these networks to meet growing demand for real-time payments.
“The consistent thing we heard was the desire for faster settlement,” says Tom Roberts, senior vice president for marketing, electronic payments, at Brookfield, Wis.-based Fiserv, referring to comments from consumers using Popmoney. The P2P service, which Fiserv launched in 2010, has offered both next-day and three-day settlement times. With Instant Payments, recipients will have access to their money in less than a minute, Roberts says.
The faster money movement is possible because of Fiserv’s ownership of the Accel debit network and an agreement forged with First Data Corp.’s Star network to handle Instant Payments transactions. Both networks are among the largest of the remaining U.S. regional electronic funds transfer switches. Fiserv this week shortened the name of the Accel network, which had been known as Accel/Exchange since 1991.
Fiserv plans to recruit more debit networks, though there is no timetable for adding a third switch, Roberts says.”We are strategically interested in expanding beyond those two networks,” he notes.
Debit networks and the real-time settlement they can offer are becoming increasingly important in P2P processing, which has historically depended on the automated clearing house network. Fidelity National Information Services Inc., a Jacksonville, Fla.-based processor that competes with Fiserv, relies on its NYCE debit switch to enable faster settlement on its PayNet network, which it introduced last fall. FIS earlier this year launched a P2P service based on PayNet called People Pay.
Financial institutions that have adopted Popmoney and are members of either Accel or Star, or both, will be eligible to offer Instant Payments transactions. Fiserv won’t disclose how many institutions this comes to but says it is under 1,000. Some 1,800 banks and credit unions now offer Popmoney or have signed up to do so, according to Fiserv, which offers the service as an app for iPhone and Android smart phones as well as on the Web.
Client institutions will price Instant Payments as they see fit. Roberts won’t discuss Fiserv’s pricing to Popmoney clients, but says the real-time capability comes with incremental cost compared to the next-day and three-day services. These costs include usage of the debit switches. “There’s additional work and cost that goes into making it an instant payment,” he notes
Roberts says consumers are becoming accustomed to faster service generally when dealing with online providers and now increasingly expect payments to be available to recipients faster. “We’re being trained as consumers to expect things to move faster in all sorts of realms,” he says, referring by way of example to Amazon.com Inc.’s next-day delivery capability.
He adds that consumers also requested the new service to meet a need for emergency payments to sons, daughters, or other relatives who don’t live nearby.
