There’s a need for speed in payments, supposedly — but how much speed is enough?
Bloomberg reported on Wednesday (May 29) that Visa CEO Alfred Kelly seemed unfazed by the move of several stakeholders in financial systems around the world — including banks and governments — to embrace faster payments. He also seemed unworried that instant fund flows between accounts would crimp the payment giant’s debit card business.
Speaking at an investors conference in New York, the executive said he was “not convinced” that faster payments “are going to take off like crazy. Does the consumer really need the funds that much faster?”
As reported, several countries are adopting faster payment schemes. In the U.S., The Clearing House (TCH) has marketed a real-time payments service over the past two years, while the Federal Reserve has mulled the creation of its own faster payments offering. Mastercard — which, of course, competes with Visa — has also made moves into real-time payments through its Vocalink acquisition, via a $920 million deal that closed at the end of 2017. Vocalink has been working with TCH, Bloomberg noted.
Kelly added that real-time payment systems do not have a feature that allows payments to be revoked if money is sent to the wrong account, or if parties are not satisfied with the transactions.
“Some of these systems are not as reliable, not as robust and, [unfortunately], don’t have the same protections,” Kelly said, according to Bloomberg. “If I now have a dispute with you over it, and there needs to be some element of chargeback, how’s that going to work? With great difficulty.”
He said at the conference that Visa would be able to work with the real-time payment offerings to improve consumer protections.