Visa is joining Mastercard in offering push payments options in Canada. Visa Direct, the faster payment option also referred to as an original credit transaction (OCT) has been used for near real time P2P transfers and is now being offered for B2C distributions as reported in IT World Canada:
Visa says its real-time service to send and receive money is already available in 200 markets around the world. Built on top of its same payment network that enables debit and credit card transactions around the world, the service allows for payments to be made directly to a bank account. It’s an ideal way to replace many business processes that currently rely on cheques, seeing as it’s a much quicker method for payment and there’s no risk of it getting lost in the mail.
Visa Direct has allowed for person-to-person payments in Canada since 2013. Now it’s working with two new partners in Peoples Payment Solutions and Telus Health and Payment Solutions. The former will be using Visa’s permissioned APIs to offer services to its business clients that enable them to send real-time payments to Visa debit cards in Canada. The latter will be making use of Peoples Payment Solutions in order to pay its customers for their benefits claims.
The number of consumers that can receive a Visa Direct payment is significant in Canada; over 90% according to this article, but it does not reach those without a Visa product or with a bank that has not enabled the Visa Direct option. Some consumers will receive a notice that their cards are not “ fast funds enabled”, meaning the financial institution will not process these types of transactions through the networks. This scenario also exists in the U.S. and impacts consumers’ ability to participate in P2P and B2C programs that offer this faster form of money movement.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group