MasterCard Worldwide on June 3 introduced an application designed to enable cardholders with Apple Inc. iPhones to initiate person-to-person funds transfers between MasterCard accounts. But thus far just one U.S. banking company is supporting the service.
The payments company last year introduced its MoneySend service, which enables cardholders with accounts at participating banks to transfer funds to each other. They can send funds to and from credit and debit cards accounts; using a debit card enables users to transfer funds directly into and out of their bank accounts, a capability many observers have said is critical to making P2P funds transfers catch on in this country.
However, no U.S. banks have agreed to offer the service in this manner, though The Bancorp Bank enables consumers to create a prepaid account specifically for MoneySend funds transfers. Users link an existing MasterCard credit or debit card to this dedicated account as a funding mechanism.
MasterCard based the MoneySend service on technology developed by Obopay Inc., which was one of the pioneers in the P2P funds-transfer market. However, Obopay used a similar model, requiring users to establish a dedicated account for sending and receiving funds, and experts have said requiring users to fund these accounts is an extra step few want to do.
Obopay said last month it was moving away from this model in favor of providing a service banks could offer to their customers.
The MasterCard app is available now through Apple’s App Store and works on both the iPhone and the iPad.
Sarah Ely, a MasterCard spokesperson, wrote in an e-mail that the card brand is “working with additional customers who plan to offer MoneySend to their debit and credit cardholders, making MoneySend a feature of the primary account for many consumers.”
Bancorp Bank has been a MoneySend partner since MasterCard introduced the service in June last year. The company said then it was talking to other issuers about offering the service to customers.
Other companies are also introducing P2P funds-transfer services. CashEdge Inc., for example, said last month five banks already are offering its Popmoney service and 165 would be offering it by midyear. Fidelity National Information Services Inc. has developed a funds-transfer service built around PayPal Inc.’s payment system, and at least one bank is testing it.
Unlike the CashEdge service, which sends funds through the automated clearinghouse system and typically takes at least a day to settle, MoneySend transfers move across the MasterCard network in near real-time.
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