Instant bank transfers are coming to PayPal and Venmo

PayPal announced this morning a plan to speed up money transfers between its service, Venmo and users’ bank accounts for those with supported MasterCard and Visa debit cards. This new “instant transfers” service will be available at a rate of $0.25 per transaction, and will deliver funds in a matter of minutes, instead of the day or so it typically takes when using PayPal or Venmo.

PayPal has been operating in the peer-to-peer payments business for nearly two decades, but the company has been more recently challenged by a number of newcomers, like Square Cash, for example, whose key advantage has been the ability to “cash out” to your bank account instantly.

Now PayPal and Venmo will offer a similar option for debit card holders with supported cards from Visa and MasterCard. The company says the feature will be available to the vast majority of cardholders, save for a handful of very small institutions.

The feature arrives at a time when PayPal is shifting its focus from being a competitor to Visa and MasterCard, to being more of a partner. For years, PayPal encouraged users to link their bank accounts to its service, as a means of routing around the large payment networks. But last year, things changed.

The company announced it was teaming up with Visa last July, and then unveiled a nearly identical partnership with MasterCard in the fall. In both cases, the idea was largely focused on helping PayPal better establish itself as a checkout option at point-of-sale – a response to the threat of Apple Pay. But the deals netted the company other benefits as well.

For example, PayPal said last year the expanded partnerships would also mean that users could instantly cash out their funds from their PayPal accounts to their supported MasterCard or Visa accounts, and the companies would no longer charge PayPal the digital wallet operator fee. PayPal would also make adding cards from Visa or MasterCard a clearer option on par with adding a bank…

Read the full article from the Source…

Back to Top