P2P Gets Some Respect

I don’t know about you, but it seems to me peer-to-peer payments have broken through some sort of barrier. Just in the past few years, the concept of allowing individuals to pay each other via mobile apps has taken root and taken off. Apps like CashApp, PayPal, and Venmo have been enabling this for years, but then the nation’s biggest banks crashed the party in 2017 with the launch of Zelle.

But if P2P has gained prominence, one issue remains: interoperability. And then there’s a secondary issue: who should enable one network to talk to another, and how?

Interoperability is important because, for all the growth networks like Venmo and Zelle have enjoyed, it remains the case that you can’t use Zelle to send a payment to a user of Venmo; it only works with other Zelle users. That’s not a defect of Zelle. It’s a feature of all the P2P systems.

Not surprisingly, the global card networks think they should be the ones solving this puzzle—and with their network reach and resources, they may be right. Indeed, Visa has already built a solution (see our story on page 9), though it won’t be widely available until the middle of next year. It’s called Visa+, and promises to let users who are signed up with one P2P service make a payment to another person who uses another network.

PayPal and Venmo will be the first two systems to participate in Visa+, with a test that starts later this year. That’s a couple of formidable players to start with, but as some observers told us last month, it’s not too much of a stretch, given that PayPal has owned Venmo since 2013. But Visa says it’s signed more players to come onboard later, specifically DailyPay, i2c, TabaPay, and Western Union. So far, though, no mention of Block Inc.’s massive Cash App wallet or, for that matter, Zelle.

Visa will be the network, that is, the interoperability provider, so you won’t need a Visa card to use Visa+. And while Visa says the service will move funds in real time, availability will depend on the banks involved in the transfer and the region they are in.

So a base of “millions” of persons in the U.S. market alone will be available through Visa+, Visa says. Exactly how many, though, it’s not saying.

No doubt interoperability is likely to be a major selling point, so Visa is on to something here. But the absence of Cash App and Zelle is a big problem, as sources have told us. No doubt Visa is working on that. The utility of Visa+ may well depend on it.

—John Stewart, Editor john@digitaltransactions.net