U.S. customers can now use any eligible Visa account to send and receive funds, or make person-to-person transactions, placing the credit card giant in a market currently dominated by online payment company PayPal, according to news reports.
The new personal payment service allows users in the United States to send and receive money directly to any eligible Visa credit, debit or prepaid account by entering the recipient's 16-digit Visa account number, mobile phone number or e-mail address, noted a post Wednesday by technology blog site, Ars Technica.
However, to access this service, the user's bank must first be a participating institution in the scheme. The names of the banks taking part have yet to be announced by Visa, the report added.
Visa made its first foray into the person-to-person payments space after implementing technical enhancements to its payment processing network, VisaNet. The credit card company also struck partnerships with two of PayPal's competitors, Fiserv and CashEdge, to offer the payment service via their respective platforms, Ars Technica added.
"Through our agreements with Fiserv and CashEdge, we can accelerate the delivery of new and innovative Visa payments services and better enable financial institutions to extend these services to customers", Jim McCarthy, global head of products at Visa, said in a press release. The company added that the new personal payments service will eliminate inefficiencies of cash and cheque payments between individuals.
Scheduled for launch in the second half of this year, Visa's personal payments service is new to U.S. financial institutions. However, company spokesperson Jason Michael pointed out that the same service is already offered by banks in other countries, including Singapore, China, India, Australia and Russia, reported The Los Angeles Times.
A VentureBeat report quoted PayPal representative, Anuj Nayar, who said: "It's clear that more companies are waking up to the power of digital money. As the leader in global online payments for the last 12 years, PayPal has unmatched advantages that we believe put us ahead of the competition.
"PayPal connects to 57 different financial networks and 15,000 local banks in 190 markets--not just in the Visa network, but with payment methods that meet our customers' preferences in markets around the world," Anuj said.
According to the company's Web site, PayPal currently has more than 94 million active registered accounts.
Battle across payment territories
The two companies have been wrestling to gain market share from each other's mainstay territories and burgeoning technologies, including online or e-payments, mobile payments, brick-and-mortar retailers and near-field communications (NFC).
In April last year, Visa spent US$2 billion acquiring CyberSource, which provides online payment and security services, to strengthen its share in the e-commerce market. At this year's Mobile World Congress in Barcelona, the credit card company also announced the commercial rollout of its NFC-enabled Paywave mobile payment system in the U.S, which is scheduled for launch in the second quarter of 2011.
Meanwhile, PayPal's parent company eBay has also been vocal about its plans to further push the online payments service beyond its stronghold to tap the potentially lucrative mobile arena as well as offline merchants.