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As more and more financial institutions, processors, and networks climb on the instant-payments bandwagon, Computer Services Inc. has introduced a person-to-person payment service with a twist: It delivers near-real-time payments to recipients’ Visa debit cards.
CSI, which calls its new service SPIN, for Social Payments Instant Network, has one client bank live on the service with several more under contract, according to Steve DuPerrieu, director of product management for the Paducah, Ky.-based provider of bank technology and processing services. The company, which DuPerrieu says hasn’t yet begun full-scale marketing for SPIN, has a built-in market among the 150 or so financial institutions using its online-banking solution and the 80 that rely on its mobile-banking product. It will add more SPIN clients through partnerships with other bankinig-technology providers, he says.
The new service comes at a time when faster clearing and settlement for P2P payments has rapidly emerged as a major trend. Big processors like Fidelity National Information Services Inc. (FIS) and Fiserv Inc., for example, have recently introduced services that offer real-time or near-real-time payments through their ownership of the electronic funds transfer network switches NYCE and Accel, respectively.
But while FIS and Fiserv rely on EFT switches to speed up settlements, CSI is using a relatively new transaction code at Visa that lets an individual send money to another person by entering only the recipient’s 16-digit signature-debit card number. CSI prepares the transactions as so-called original credit transactions (OCTs) and hands them off to Visa, which Visa then passes on to recipients’ banks for posting to the checking account linked to the designated Visa debit card. Because CSI client banks can verify funds availability, transactions clear in a matter of minutes.
DuPerrieu says a similar arrangement with MasterCard is in the works. “We’ve agreed in principle with MasterCard on the concept,” he tells Digital Transactions News. “That’s going to be something that happens over the next four to six months.” Also on the horizon is the ability to send money using only an e-mail or text message with a link for the recipient to claim funds, he adds, making it unnecessary to enter the debit card number. “Those are road-map items,” he says.
Besides speeding up payments, DuPerrieu says CSI wanted to make the process of getting funds easier for payees. With PayPal and similar non-bank systems, for example, recipients must receive money into their accounts and then move it later into their checking accounts. “That’s really not a very good experience,” DuPerrieu says. “It’s an easy experience for the sender but the receiver has to do the lion’s share of the work to get those funds into their checking account. We thought, How do we make it easy for receivers? They’re the ones emotionally invested in the transaction because they’re the ones owed the money.”
CSI chose to call the new P2P payments “social” payments because they involve transactions between individuals. “Point of sale is not a social payment,” DuPerrieu says. “But payments to my brother or another person are really social payments.”
As for pricing , CSI is looking at charging client institutions between 15 and 20 cents for each SPIN transaction, DuPerrieu says. Pricing to senders will be up to each bank.
