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Visa takes on PayPal with personal payments

Visa has announced its intention to take on PayPal with its own personal payment system, allowing Visa card holders to transfer money directly between one another.

The company's personal payment system takes its cues from PayPal, the eBay-owned payment gateway that allows one PayPal member to quickly send money to or request money from another PayPal member via their e-mail address or mobile number.

Visa's plan goes a step further, allowing card holders to transfer money to an individual via e-mail address, mobile number, or their 16-digit Visa account number - and the service will be valid for all Visa credit, debit, and pre-pay account holders.

Although the service is US only at the moment - and only with 'participating financial institutions' at that - it's a clear assault on a market almost entirely dominated by PayPal. It's a lucrative market, too: PayPal makes its money by skimming a little off the top of each transaction, charging people a percentage for accepting money into their account.

Visa's own technology is enhanced via a partnership with CashEdge and Fiserv, two of the biggest names in person-to-person payment technology and the creators of the Popmoney and ZashPay platforms respectively.

"For fifty years, Visa has worked to simplify payments at the merchant point of sale," claimed Visa's global head of products Jim McCarthy. "We are now evolving our network capability to make it easier for our account holders to pay one another.

"Through our agreements with Fiserv and CashEdge, we can accelerate the delivery of new and innovative Visa payments services, and better enable financial institutions to extend these services to customers."

While Visa has similar programmes running in non-US countries - with around 70 distinct personal payment systems overall, the company estimates - this US launch indicates the first time a payment gateway provider has introduced a global requirement for financial institutions to accept incoming funds.

The programme is expected to go live in the US in the second half of this year, with Visa likely to tie its other, disparate personal payment services in to a single, centralised global platform as soon as is practical.