Visa CEO Kelly breaks with big banks on need for faster payments
For Visa Inc., money moves quickly enough.
Banks and governments around the world have invested in systems that seek to instantly transfer money between accounts, moves that could put pressure on the sprawling debit card business at the world’s largest payments network. But Visa Inc. Chief Executive Al Kelly isn’t too worried.
“I’m not convinced that these are going to take off like crazy,” Kelly said Wednesday at an investor conference in New York. “Does the consumer really need the funds that much faster?”
In the U.S., an association known as The Clearing House — which is backed by the biggest banks, including JPMorgan Chase & Co. and Bank of America Corp. — has been promoting a real-time payments service it introduced in 2017. Adoption of the new technology has been slow and, in the meantime, the Federal Reserve has explored building its own system.
Visa rival Mastercard Inc. made its foray into real-time payments with its $920 million purchase of VocaLink, which has been working with The Clearing House.
Real-time payment systems often don’t have the ability to revoke funds if money is sent to the wrong person or goods aren’t delivered as promised, Kelly said on Wednesday. He said Visa could begin working with real-time systems to improve consumer protections.
“Some of these systems are not as reliable, not as robust and very unfortunately don’t have the same protections,” Kelly said. “If I now have a dispute with you over it and there needs to be some element of charge-back, how’s that going to work? With great difficulty.”