Visa recently announced Visa+, a new service that will allow money to be sent and received across differing digital payment platforms. Currently, most digital payment transfers take around 3 business days to complete. It is an instant payment solution, meaning the transfer will be completed instantly in real-time. These instant P2P payments are faster, more secure, and provide better financial freedom by not having funds held up between transfers.
Visa+ is not to be confused with Visa Direct. Visa Direct are P2P transactions, whereas Visa+ is the payment rail that enables instant payments. The two work in tandem with one another.
Visa+ is partnering with PayPal and Venmo to initiate a pilot. Although PayPal and Venmo are owned by the same parent company, their technological infrastructure does not support the instant transfer of funds between the two platforms. The aim is to enable digital payment transfers between the two different platforms. Later this year, all Venmo and PayPal users in the U.S. will be able to move money seamlessly between the two platforms.
Visa+ does not require users to have a Visa-branded debit or credit card. The only requirement to use it is users will need to link a payment address to the pre-existing Venmo or PayPal accounts. We like that it does not require yet another account creation, we already have too many passwords memorized! It enables more payment-related use cases, including instant payouts for earned wages of gig workers, creators, and marketplace sellers. Millions of users across digital wallets, neobanks, and other payment apps are said to have enabled interoperability with Visa+.
Given Visa’s sheer size and number of transactions that fly on their rails, it will make an impact by providing this instant payment capability. It is building interoperability across payment platforms, something that hasn’t been achieved yet. According to the U.S. Faster Payments Council’s Third Annual Faster Payments Barometer, interoperability is one of the most important topics in the payments industry today.
Alongside PayPal and Venmo, other payment providers such as DailyPay, i2c, TabaPay and Western Union will be plugged into Visa+. Through these partnerships, Visa+’s reach will expand. As the demand for instant payments grows in the U.S., payment providers will need to catch up with the trend. It is providing an excellent opportunity for smaller payment providers to keep up with the demand as they leverage the technical infrastructure provided. We expect more payment providers to partner with Visa+ in the future.
Overview by Sophia Gonzalez, Research Analyst, For Debit and Payments at Javelin Strategy & Research.