MasterCard Inc. on Tuesday launched a person-to-person payment service in the United States that will allow debit card holders to send money to any other individual with a debit card account, regardless of the card brand and with the money arriving nearly instantaneously.
The new service, dubbed MasterCard Send, also enables cash disbursements for companies sending money, such as insurance payouts or rebates, to individuals. Among the first such users are Berkshire Hathaway Travel Protection and FreeShipping.com, according to MasterCard.
MasterCard Send will be available for cross-border remittances in the near future, a spokesperson for the network tells Digital Transactions News. For these payments, MasterCard will rely on HomeSend SCRL/CVBA, a Belgium-based provider of remittance solutions.
To make the new service work, MasterCard has created a central hub that serves as a sort of back-end switch to ensure connectivity with debit card accounts across the country. In this manner, MasterCard Send is meant to work with existing P2P payments services, the spokesperson says, rather than compete with them. “That’s what the platform was developed for,” she says.
Several services have launched recently to manage P2P payments between debit card holders. Among these are Square Inc., with its Square Cash service, and Facebook Inc., which in March launched a service that leverages its Messenger app.
MasterCard, which launched a money-transfer service called MoneySend years ago, may be reacting to recent moves by these and other major technology players. “MasterCard] has been tinkering in this area for awhile,” says Steve Mott, principal at Stamford, Conn.-based consultancy BetterBuyDesign, by email. “[MasterCard Send] shows they are committed to being in this space where new players like Square, Google, and Facebook are moving to crack the code on digital payments.”
But what may distinguish MasterCard Send is the speed of settlement. Debit card transactions, while often viewed as real-time transfers, can in actual practice take up to a day to settle. On a page on its Web site devoted to the new service, MasterCard says transfers will occur “typically within seconds.”
That aligns MasterCard Send with a general movement that has emerged recently in the payments business to work toward real-time or near-real-time payments. Big organizations like The Clearing House, a New York City-based company controlled by major banks, have been working on speeding up payments. And the Federal Reserve has been shepherding an industrywide initiative toward the same goal.
MasterCard will not comment on any specific P2P service it may be working with or talking to. Pricing for transactions handled through MasterCard Send will be determined by the service provider, the spokesperson says.