Visa pilots Visa+ to increase connectivity among payment systems
- To bridge the gap among P2P payment apps and enable real-time payouts to digital wallets, Visa is launching its new Visa+ service.
- Through a string of partnerships, Visa+ also aims to expand its scope and enable more B2C use cases, including faster payouts for creators, marketplaces, and gig economy workers.
Consumer payment preferences have seen a significant shift in the last decade – money isn’t so much changing hands anymore as it is moving from one payment app to the next.
Payment apps have picked up steam in recent years due to consumers’ widespread adoption of smartphones and increasing inclination toward online commerce.
Younger Americans are largely driving the growth of these transactions, fueled partially by rewards or loyalty programs offered by payment app providers. Nearly half (47%) of US adults who use peer-to-peer (P2P) payment apps like Venmo, Zelle, PayPal, and Cash App split bills for restaurant meals, groceries, and other regular purchases. And, a large number, 53% of 18- to 25-year-olds and 50% of 26- to 41-year-olds report relying on payment apps more often as a result of rising costs, according to a new survey.
Yet, there lacks a widely available solution that enables customers using different payment systems to connect and exchange transactions in real-time – Venmo to PayPal or the other way around, for example.
To bridge this gap among different apps in the P2P payments space and enable real-time payouts to participating digital wallets, Visa is launching its new Visa+ service.
To use the new service, consumers set up a personalized payment address called a Visa+ payname linked to their Venmo or PayPal accounts. After enabling Visa+, consumers using either app will be able to receive and send payments quickly between the platforms, without going back and forth across multiple payment apps or requiring a Visa card.
Venmo and PayPal users in the US will have access to the service later this year, with general availability mapped out for mid-2024.
“Visa is focused on providing choice to end users and it is end users who will decide what method works the best for them,” said Vikram Modi, head of Visa+ at Visa.
Interoperability also helps reduce fragmentation and advances standardization across various payment systems, which can improve consumer experiences, improve retention, and lower costs.
In a move to strengthen interoperability across payment platforms, DailyPay, i2c, TabaPay, and Western Union are collaborating with Visa and plan to integrate Visa+ within their platforms going forward. Through this string of partnerships, Visa+ also aims to expand its scope and enable more B2C use cases – including faster payouts for creators, marketplaces, and gig economy workers.
“Reaching common goals and metrics for technical, network, and regulatory interoperability is an essential next step toward the ultimate goal of a more equitable and inclusive payment system,” added Modi.
But the development of new payment methods is also providing new opportunities for fraudsters and scammers resulting in fraud becoming rampant. Venmo scams, for example, can take many forms including romance scams, fake links, or attempts to steal not only money but also users’ personal information.
In the US alone, authorized push payment (APP) scams could cost consumers $3.1 billion by 2026, up from $1.6 billion in 2021, a new report highlighted.
In the case of Visa+, the service ensures additional privacy through its paynames, not necessitating sharing emails, phone numbers, or other account details with other users to receive funds, according to Modi. This allows consumers to receive and send payments across different participating apps securely, without disclosing sensitive personal data or sharing classified details with others.