Digital Payments

PayPal, Visa Bring Instant Settlement To SMBs In Canada


Payment bottlenecks cause problems for all types of consumers and companies, not the least of which are small and medium-sized businesses (SMBs). But a new offering from PayPal and Visa could help ease those frustrations and hassles.

The two payments firms announced on Tuesday (July 2) the launch of PayPal’s Instant Transfer in Canada for SMBs and individual consumers. “Powered by Visa Direct, Visa’s real-time push payments solution, (Instant Transfer) moves money from customers’ PayPal accounts to their bank account via their Visa debit cards — providing an experience that offers speed, security and convenience, 24/7/365,” according to statement describing the launch.

SMB Needs

In advance of the launch of Instant Transfer in Canada, PYMNTS caught up with Paul Parisi, president of PayPal Canada, to talk about this specific offering and the larger context of offering such a payment capability. The offering is likely to appeal to SMBs more than the average consumer, he said. “Typical SMBs need their money faster,” Parisi said. This new offering will enable SMBs operating in Canada to receive in much quicker fashion the money they are owed from customers, he said, and that, in turn, frees up more funds for business operations and business investment.

This announcement concerning Canada follows the launch in March of Instant Transfer to bank for qualified individual and business customers in the United States. That news followed PayPal’s success with its Instant Transfer to debit card, which debuted last year and where balances in PayPal accounts can be transferred to debit cards instantly. In addition, the company also heralded a 2018 launch of Funds Now, which helps qualified companies gain instant access to funds from their completed sales — and where uptake has spanned more than 3.5 million businesses across several countries, among them the U.S., the U.K., Australia, Italy and Spain.

The new Canada Instant Transfer offering reflects growing desire for quicker payments and instant access to funds. PayPal says that “60 per cent of consumers report that having funds available more quickly for personal use is a benefit of real-time funds disbursements.” Not only that, but “for small businesses, the ability to manage cash flow is critical to their growth and success — 85 percent of small businesses say they would likely switch to a new merchant acquirer who offered real-time payments.”

Right Timing

When asked why now was the right time for this offering in Canada, Parisi told PYMNTS, “Frankly, a year ago would have been the right time. The sooner you get into the market … the more help you can provide.” PayPal is using Visa card rails for the program because the two organizations not only have a relationship, “but simultaneously” came to the conclusion that this was the right time to launch this payment capability in Canada.

For now, the new offering is available to what PayPal called an “early access group of PayPal customers, with plans to be released across Canada in the coming months.”

When it comes to the demand for quicker payments and instant funds access, existing payments infrastructure has not kept pace. Digitalization has brought about faster technology, but paradoxically, sometimes slower access to funding. Think, for example, of ACH and batch payments — same-day settlement is an option to be sure, but during normal business hours. Weekends and holidays can stretch out the period between the time when funds are deposited and when they are actually available to be used or withdrawn.

But as this newest PayPal and Visa program shows, steps are being taken to address that gap — broadly speaking, expect more such offerings in the coming months and years, especially those focused on the needs of SMBs.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.