With bank-backed rival Zelle looming, PayPal is revamping its Venmo P2P payments service to let users transfer money to their bank accounts via eligible debit cards in a matter of minutes, rather than the day it currently takes.
The new feature – currently in beta but coming to all US users in the next few months – is the fruit of PayPal’s recent detente with Visa and Mastercard after years of bitter rivalry with the card giants.
Available to all US users with eligible Visa and Mastercard debit cards linked to their accounts, the option will cost 25 cents a transaction. Rival Square Cash charges a one per cent fee for instant transfers.
PayPal say the new feature is possible in part because of its “closer relationship with the bank and card issuing ecosystem” but it also comes as the banks threaten Venmo’s dominance in the money transfer market through their Zelle rival.
Zelle is about to begin its roll out to the banking apps of more than 30 participating financial institutions, offering instant transfers to tens of millions of Americans. A standalone Zelle app is also set to arrive later this year.
Also on the horizon is Apple, which is set to introduce P2P payments as part of a forthcoming update to its mobile operating system. The new feature enables users to send money and get paid right in Messages, or tell Siri to pay someone, using the credit and debit cards they already have in Wallet.