“It’s a simple idea with extraordinary impact”: Inside the growing world of push payments
- Push payments are enabling whole ecosystems of startups.
- Here are some major ways push payments are transforming the landscape.

The world of push payments -- sending rather than taking money from an account -- is rapidly expanding and changing the way many businesses work. Push payments are one of the contributing factors to the rapidly growing world of electronic payments, which are growing at about twice the rate of gross domestic product in the United States, and even faster in places like Asia, according to a report from McKinsey & Co.
“It’s a simple idea with extraordinary impact,” said Shari Krikorian, senior vice president, push payments, at Mastercard, one of the major players behind the concept. The technology is largely associated with startups, and is the basis of well-known transformative giants like Zelle and Venmo. But the main players providing the infrastructure are the traditional credit companies, including Visa and Mastercard, which have opened up platforms and brands, like Mastercard Send and Visa Direct, to concentrate on push payments made from debit cards.
“Push payments are a natural extension of the card networks’ product set and leverages their existing infrastructure,” explained Allen Weinberg, a partner at San Francisco-based Glenbrook Partners, a payment strategy consulting and education firm. “Rather than having merchants take money, It could be useful to think about push payments over existing card rails as a purchase transaction in reverse. Instead of taking money from a person’s checking account to pay for something, the same “rails” can be used to push money into the bank account already tied to their debit card.”
Here are some of the major ways push payments are transforming the landscape:
Corporate payouts: Some of the biggest users of push-payment platforms are insurance companies, disaster-relief organizations and others who need to issue money quickly to multiple customers and consumers. Push payments are cheaper and faster than sending checks, and customers tend to be more satisfied with them, Weinberg said. This field is one where partnerships are key, with payment platforms providing the link between insurance companies and the push payment infrastructure offered by Visa and Mastercard.
American Family is one of the larger and more-established insurance companies to begin offering instantaneous cash payouts powered by Visa Direct and other partners like InsurPay, a builder of payment platforms for the insurance sector. These payments are part of the “modernization of more traditional industries,” said Bill Sheley, at Visa Direct. Push payments also allow merchants to issue instant refunds that are truly instant, said Mastercard’s Krikorian.
Cross-border transactions: Push payments are also making it quicker, cheaper and less-cumbersome to send money around the world. Following in the path of Transferwise, traditional money transfer companies are increasingly embracing push payments to save users money and speed up transactions. Global money transfer company MoneyGram recently launched a service that allows anyone in the United States to send up to $10,000 to the debit card of anyone in Spain or the Philippines using Visa Direct. Like many domestic push payment services, senders only need the phone number of the person they are sending money to. Immediately, the receiver gets a text message.
“They then click a link to have the money deposited within minutes,” said Stephen Reiff, head of corporate strategy and communications at MoneyGram.
MoneyGram is working on expanding the service, with plans to launch soon in the European and Asian markets. Competitor Western Union has also announced a partnership with Visa Direct for a similar service in some markets. Krikorian and Sheley both said cross-border transactions will likely emerge as a key area of growth and innovation involving push payments.
Peer to Peer Transactions: This is also a growing area of focus for push payment providers and innovators. It is push payments that allow users to send money to a friend right away via Zelle, Venmo and other platforms. “The opportunity in the P2P market is largely driven by today’s on-demand economy where consumers expect to have the ability to pay back friends immediately for dinner, or pay their landlord instantly for rent,” Sheley said.
Another driver behind this market sector is also the emergence of a feature called Request to Pay, in which someone sends an email or text message to someone asking to be paid a certain amount. “The recipient of the RTP message merely has to click on a link containing the payee’s or requestor’s Venmo or Zelle identifier and requested amount and validate or approve the funds request,” without having to share sensitive or tedious details like bank account information or credit card numbers, Weinberg said.
Payroll: Push payments are changing the way many people get paid, from freelancers to some employees, by letting them receive money as soon as they earn it. At Uber, a driver can get paid up to five times a day, literally cashing in on rides as soon as passengers or products are delivered. Such immediate payments can make a big difference for people who live paycheck-to-paycheck, said Bryan Derman, also partner at Glenbrook.
“The ability to be paid for work on a daily or more frequent basis is very helpful in addressing cash flow and reducing borrowing costs,” Derman said. We are starting to see the same thinking applied to traditional hourly and salaried work. Workers are asking, “Why do I have to wait two weeks before being paid for the work I’m doing right now?”
Concerns are growing about fraud: Instances of authorized push payment fraud are growing, rising by 44 percent in the UK in 2019, with elaborate scams tricking a growing number of consumers to send money, according to a study by UK Finance. Because push payments rely on the sender, rather than the receiver, to authorize the payment, prosecuting scammers or getting funds returned is difficult. In traditional transactions, banks and other financial institutions are legally required to reimburse or cancel payments that a customer says are fraudulent, including in cases where someone steals a card or card number and uses it to make purchases.
Some countries, including Japan and South Korea, are also making regulatory changes to address and reduce such fraud, and now guarantee in many cases the reimbursement of funds and the freezing of scammers’ accounts. The UK has instituted a voluntary framework to protect consumers against fraud.
It is exactly the quick and instantaneous nature of the payments -- the same factors driving their popularity -- that make them vulnerable to fraud, Weinberg said. Zelle and other platforms increasingly warn about not sending money to requests you don’t recognize. And this type of fraud is also a growing factor behind more complex online baking logins. “A criminal who gains control of your bank login now has the ability to push money to an account they control in real time,” Weinberg said.
Mastercard’s Krikorian said tokenization is an increasingly important tool in protecting push payments because unlike encrypted data, tokenized data cannot be reversed or decrypted.
Rise of same-day ACH: The growth in push payments and the demand for quick transfers of money has pushed the traditional ACH system, a clearing house for bank payments, to offer faster options, Weinberg and Derman said. While the ACH system has long offered the ability for senders, rather than receivers, to authorize transfers, this process often took days. Now, there are more options for same-day transactions, although the service remains a business rather than consumer product.
But credit card companies are increasingly eying this system, with Visa recently purchasing Earthport, an ACH provider.
Officials at Mastercard and Visa said they envision using both types of systems to build better payment methods.
“Through a combination of the existing Visa network and the addition of the Earthport network, Visa Direct clients will soon be able to push payments to the majority of the world’s banked population,” Sheley said. “Our vision is to enable our clients to collectively reach bank accounts of consumers and small businesses in almost 200 countries all via a single connection.”