Published on July 22nd, 2016 | by Chuck22
Paypal Partners with Visa, Enables Instant Withdrawals via Debit Card
Paypal and Visa announced yesterday, July 21, a strategic partnership to expand cooperation between the two companies and launch numerous initiatives using their combined networks.
Here are the details from the Press release, with my italicized commentary.
- Enhanced Consumer Choice and Improved Experience for Visa Cardholders. PayPal promises not to push people toward a bank and away from their Visa cards; Visa and ACH will be presented as equal in all ways and Paypal won’t encourage Visa cardholders to use ACH instead of Visa.
- Sounds good to me…Apparently, they’ll continue pushing those without Visa’s to use ACH, but not if you have a Visa.
- Some Paypal accounts allow you to set a credit card as the default payment method, but not all accounts allow it. Hopefully, going forward, we’ll be able to do so, at least with Visa cards.
- PayPal will Join the Visa Digital Enablement Program (VDEP) to Expand Point of Sale Acceptance which will allow will Paypal to expand on their in-store payment processing.
- I never quite took to all these digital wallet schemes, swiping usually ends up easier for me. They also make it a hassle to add cards to some digital wallets, and that’s terrible for those with lots of new cards. Until they stop issuing plastic cards, I’ll keep using ’em. 🙂
- Instant Withdrawal of Money: Consumers will be able to instantly withdraw and move money from their PayPal and Venmo accounts to their bank account via their Visa debit cards leveraging Visa Direct.
- This sounds very interesting. It usually takes days for the money to land up in your bank account, now it’s supposed to be instant if you use a Visa debit card number. Won’t help for those banks who use the Mastercard network for their debit cards.
- Enhanced Data Quality: PayPal will ensure that data provided to issuers and their cardholders for Visa-funded transactions will be consistent with the information that is received with traditional Visa card transactions. This will ensure a better consumer experience, reduce cardholder confusion, ensure proper application of rewards, and reduce costly and time-consuming disputes.
- This might mean that Paypal transactions paid with Visa won’t come up on the statement as “paypal * xxxyyyzzz” and instead it will look like a direct charge.
- Economic Incentives: The agreement affords PayPal certain economic incentives, including Visa incentives for increased volume, and greater long-term Visa fee certainty.
To summarize: Paypal gives up their push to ACH and their specially coded transactions. Visa helps Paypal with in-store transactions, allows them to use their debit cards as bank transfers, and offers incentives for volume.
On a related note, I’ll mention that while I have no love for Paypal, I’ve been using Venmo, a Paypal company, for some time now to send money to friends, and it works beautifully. For months, I’ve been waiting for the ‘Paypal-headache’ to hit me, but it never did. So weird how the same company runs different policies on different payments websites.
Venmo is also much quicker than Paypal, in my experience, to get the money to your bank. Of course, going forward, if you use this new Visa debit option with Paypal or Venmo, it’s supposed to be instant.
Hat tip to pymnts.com