March 16, 2011

As we have noted on more than one occasion, the U.S. mobile payment market is a wide-open playing field. Many players, including Visa, MasterCard, banks, PayPal and mobile carriers, would like to establish supremacy in the emerging work of enabling consumers to make payments with their mobile devices.

Visa, which feels the pressure perhaps more than most, has been testing contactless mobile payments in New York City and Los Angeles and yesterday announced a four-week internal trial of mobile payments with Australia and New Zealand Banking Group. Today the card giant announced a deal with Fiserv and CashEdge to extend their person-to-person payment offerings to Visa cardholders. This gives Visa a mobile payment foot in the door at the 500 banks and credit unions that use Fiserv's ZashPay and the 170 banks that use Cashedge's Popmoney and adds two mobile payment options to its card network. It should help increase volumes and fee income for the card network as mobile payments pass over it. For CashEdge and Fiserv, the deal extends their payment offerings to Visa's one billion cardholders. The new, integrated person-to-person payment mechanisms should be ready this summer.

Fiserv's ZashPay currently enables payments to be sent directly to any U.S. bank account in a day or so; real-time payments will be available later in 2011. Initially the ZashPay-Visa service will focus on payment delivery to eligible Visa credit and debit account holders, with plans to expand to prepaid and international account holders in the future. The service will be available to both consumers and small businesses using ZashPay.

Visa will work with CashEdge to enable the integration of CashEdge's P2P email/mobile payments service, Popmoney, with Visa credit, debit and prepaid cards. Customers of banks that offer Popmoney will be able to send person-to-person email and mobile payments using a recipient's email address or mobile phone number. Recipients will be able to direct these funds to be transferred to any Visa-branded credit, debit or prepaid card.

Like ZashPay, Popmoney facilitates person-to-person payments between bank accounts; the Visa deal will allow customers to send money domestically or internationally to recipients who may lack a traditional bank account, or to those who simply prefer to receive the funds directly to an eligible Visa prepaid, debit or credit account. Use cases include parents sending money directly from their online bank account to their kids in college, using only an email address or mobile number, and kids directly downloading that cash onto their Visa card; sending a cash gift to a relative in another state; or paying someone back for a split bill.

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