MasterCard seeks to move digital money fast

NEW YORK — MasterCard wants to speed up digital payments.

The financial services giant has just launched MasterCard Send, which the company claims as a first-of-its-kind global platform that promises to move funds into your debit accounts in a half-hour or less, compared to the one to three days that is typically how long automated check clearinghouse transactions take.

According to MasterCard, more than $1 trillion is spent globally each year on transactions where people are using paper checks or cash. Under MasterCard Send, payments made for insurance claims, rebates, tax refunds and so forth would be made to your debit card and dispatched in near real-time.

The program is agnostic across brands. That means you don't have to use a MasterCard debit card to take advantage of the platform. But MasterCard isn't marketing MasterCard Send directly to consumers. In that sense, the new platform isn't analogous to a PayPal or Venmo. Instead, MasterCard is soliciting business partners which could then get money to customers more quickly. The Send program can also be used to move money across borders, including to "unbanked" people in developing nations.

Anyone that wants to take advantage of Send in the U.S. would have to register their debit cards with participating providers of which Berkshire Hathaway Travel Protection and FreeShipping.com are the first to be announced publicly.

"You're immediately pulling from an existing source of funds so there's no issue of `is the provider good for this money?'" says MasterCard's Cheryl Guerin. "It's like a normal transaction through the debit card system. You don't have to go through that clearing process."

MasterCard also says the system is more private and secure than writing checks.

The company hopes folks looking to pay the dog sitter, handyman, or to complete other "peer-to-peer" type transactions will also be able to use the Send system for such purposes.

"Providers that want to offer a P2P service will be using our system to enable (those sorts of scenarios)," says Guerin. "We consistently look at opportunities (to) drive more transactions through electronic payments and away from the inconvenience of cash and checks. And there definitely was room in this space for being able to do that."

Indeed, James Wester, the research director for global payments at IDC, sees this as a step forward.

"Consumer payments in the U.S. have been slow in keeping up with an on-demand economy where consumers have instant access to so many services through their mobile devices," he says. "The delay they experience in receiving funds, for instance waiting for a check to clear or money to settle into their accounts, has become an anachronism. Unfortunately, many of the proposed solutions to the issue from the Fed or through ACH (Automated Clearing House) are still just proposals with expected implementations that may be years away. So this is an important step in bringing payments up to speed."

Email: ebaig@usatoday.com; Follow @edbaig on Twitter