Stripe announced that it will be joining a few other payment processors in offering merchants the opportunity to receive their funds from purchases within seconds or at least minutes rather than waiting days. Called Stripe Instant Payout, this service will compete with similar solutions from Worldpay and Square. Not only is it the increased speed that merchants will enjoy, but these balances will be forwarded to merchants every day of the week. This can be particularly valuable to merchants whose business volumes are concentrated around weekends and holidays. The catch: the merchant needs to have a debit card. Stripe Instant Payout uses Visa Direct which sends the funds as a credit through the debit network and relies on a debit card number to complete the deposit. The following describes this feature launch from Stripe:
Visa, has teamed up with Stripe, a fintech company focusing on online payment processing, to enable its real-time push payment solution on Stripe Connect, the company’s solution for multi- sided marketplaces and platforms.
Visa Direct offers real-time push payment capabilities to business owners and consumers via the cards they already carry in their wallets. Funds are available within minutes, providing speed, convenience and security to the payment experience.
With this integration, verified sellers using Stripe’s Instant Payout feature will be able to receive payments immediately on their Visa debit cards. This is a faster option than the current standard payment process, which is a payment from Stripe to the sellers’ bank accounts, which normally takes a few days to process.
Carousell was the first merchant to use this solution to enable sellers in the online marketplace to receive funds immediately. The second merchant to use Stripe’s Instant Payouts feature powered with Visa Direct, is local ride-hailing app, Ryde. Ryde will be using this solution to pay all drivers under its network.
Overview by Sarah Grotta, Director, Debit and Alternative Products at Mercator Advisory Group