Payment stock Visa (V) has inked a deal with privately held Ingo Money to offer companies an alternative to paper checks, as business payments belatedly move into the digital age.
XIngo Money QuickConnect is touted as a turnkey solution that allows companies to pay customers immediately via push-to-card payments through the Visa Direct platform.
"There has been significant growth in push payments driven by increased customer demand for instant access to funds," Visa Direct North America head Cecilia Frew said in a press release. "We are excited that Ingo Money, one of our first enablement partners, is helping to maximize Visa Direct's capabilities to create a seamless, integrated push payment solution for end-users through Ingo Money QuickConnect."
Business Payments To Consumers
Ingo Money QuickConnect is a B2C (business-to-consumer) focused software service. It allows businesses to pay money directly to a customer's bank account through its debit card, a so-called "push-to-card" payment. The Visa network will facilitate the transaction. It is packaged as a consumer API, iFrame, or full software-as-a-service solution.
Ingo Money CEO Drew Edwards said businesses have held back on push-to-card payments due to the time and effort to implement them.
"Ingo Money QuickConnect removes the burden and allows a company to almost immediately begin offering real-time payments through Visa Direct, while retaining the ability to easily expand the solution later to include payments to online wallets like PayPal and Amazon or even cash out MoneyGram locations," Edwards said in a press release.
The Georgia-based firm claims this method could replace up to $33 trillion in payments made via paper checks and the old Automated Clearing House system, which dates back to the 1960s.
The $1 Trillion Business-To-Business Payments Opportunity
So far the payments revolution has lagged in one key area: business-to-business payments. B2B payments are largely a lose-lose scenario for businesses and their suppliers stuck with 20th-century inefficiencies. But it also offers a $1 trillion opportunity for payment stocks like Visa, Mastercard (MA), Square (SQ) and PayPal (PYPL), as well as many private startups.
Consumer Payments Far Ahead Of Business Payments
Platforms such as PayPal's Venmo and Square have helped popularize pushing of payments in real time over Visa and Mastercard networks. Lyft and Uber pay drivers directly to their debit cards.
However for most business-to-business payments, the method of choice is still paper. The average small business devotes five people to processing accounts payable transactions. For a medium-size enterprise, the number mushrooms to 11.
At the moment B2B payments average 45 days to process. New technology offers the potential to dramatically contract this time window.
Goldman Sachs sees business-to-business payments as a $950 billion global annualized opportunity for payment stocks. North America, which lags Europe in the adoption of new payment methods, will make up $186 billion of that.
Wedbush Securities analyst Moshe Katri believes business-to-business payments are just beginning to catch fire.
"The investor base has been fully aware of B2B as another opportunity related to payments," he said. "But the technology and the appetite for that is just beginning to emerge."
Visa stock, a Dow Jones component, fell 0.2% to 137.54 on the stock market today, hitting resistance at the 50-day line. Mastercard stock sank 0.7%, Square stock lost 1.2% and PayPal stock advanced 1.2%.
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