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:
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