In this particular case, better late than never. I'm also relatively certain that Visa will be in a strong position to dominate the space, if only because of their brand presence.
I'd much rather get online with my Visa Card (which is hooked up directly to my bank account, as it is for many other PNC customers and, I'm guessing, customers of other banks) to transfer money to my friend than I would write him a check. On the other hand, I don't have a Paypal account, and would be unlikely to want to screw with it.
I think there will be a lot of people who see this like I do.
Well, 10 years ago paypal was 3 years old and the space was very far from proven.
Person-to-person payments still suck. I don't want to use paypal thanks in part to the stories about them freezing funds with no recourse but also because it's yet another account to manage.
Visa on the other hand has a huge established base and if they can make it easy (send x$ to CC No XXXX-XXXX-XXXX-XXXX? and that's it) I would definitely use it.
And since Visa is huge and has partnerships everywhere if this takes off in the slightest Mastercard will jump on board and suddenly nearly everyone with a credit card can accept payments from each other. Paypal's revenue will take a good hit for sure.
Big companies, especially in the financial sector, don't hop into a new market until it's both stable and large enough to make it worth their while. Person-to-person has now been proven to be big and viable by Paypal so the CC companies are right on schedule to try to muscle their way in and eat Paypal's lunch.
I just moved to the UK from the US. The concept of sending people money via PayPal is more or less non-existent within the country. Why? Because you just get someone's bank details and transfer the money. I pay all of my bills via bank transfer. Oh, and it's free. It astounds me how easy it is to do. From Barclay's to HSBC for example (I pay my flatmate this way) it transfers it almost in a few hours.
Why can't the US do this? Too much money in it for the banks?
They can, they just charge an arm and a leg for it and make you go through a big hoop and dance to actually use it. Wire transfers cost $20-$40 for each transaction (And usually are associated with systems with such names as "Large Value Transfer System (LVTS)". ACH is usually only allowed with accounts you can prove ownership with and they charge for pushing money into another external account, but usually not for pulling money. Even then they hold the funds for 3-4 business days. It's cheaper and faster to just order paper checks, write them down, give it to a teller or ABM to take the check to deposit into your account than to use ACH or wire transfers. It's even worse in canada. At least US banks have ACH transfers and wire transfers available on their online banking websites! The closest thing is Interac e-transfer. I think it just comes down to liability and fraud risk exposure. A guy who knows your password can clean you out.
Some banks have had this ability even in credit for a long while. The reason it has taken so long for the likes of VISA to join the crowd is the ironing out of issues like money laundering.
