MasterCard Explores P-to-P E-Mail Payment System

MasterCard International and CertaPay, a leading person-to-person (P-to-P) platform solutions provider, have formed an alliance to enable consumers to send and receive money--in real time, using only an e-mail address--from their own financial institution's online banking or online account management services.

The CertaPay P-to-P offering is designed to support MasterCard payment cards and to seamlessly integrate into a financial institution's online banking infrastructure, leveraging the institution's own security and brand strategies.

MasterCard recently introduced support for a new payment transaction in its authorization and clearing systems to enable its members to clearly identify P-to-P transactions.

The P-to-P market is growing rapidly. Internet-based person-to-person payments will grow from 42 million transactions in 2000 to more than four billion transactions in 2005, according to TowerGroup.

The CertaPay solution gives consumers a new kind of convenience, according to Carl Stefanelli, vice president, e-commerce product development at MasterCard International. "By expanding the utility of the traditional payment card and enabling it to receive payments from others, consumers will benefit."

MasterCard members that install the CertaPay platform can offer their customers the ability to use their MasterCard credit or debit account to pay another person through their participating financial institution. To transfer money by e-mail, the customer follows four simple steps: log on to his/her online account with their participating financial institution and click the e-mail payment feature; insert the recipient's name, e-mail address and the amount of the transfer; identify the MasterCard account or other account (checking, savings) from which to take the funds; write a personal note to the recipient of the funds.

The recipient instantly receives an e-mail notification with a hyperlink to accept the funds and then decides where to deposit the funds, whether it is a MasterCard account or bank account.

If the recipient is a customer of a bank using the CertaPay system, the funds are received in real-time. The funds are transferred using existing payment clearing arrangements. If the recipient does not yet bank online at a CertaPay partner institution, he/she must register himself/herself as a new CertaPay user. The process is done quickly and securely online.

The recipient receives a final confirmation of the deposit of funds.

Consumers will not have to reveal their account information to the other party while conducting the P-to-P transaction and no money will be transferred through the e-mail notification system.

"People are looking for ways to transfer money to each other directly and in real-time at a reasonable cost," according to Michael Ginsberg, CEO at Toronto-based CertaPay. "E-mail is a natural medium to facilitate money transfer because it is ubiquitous and international, and everyone knows how to use it. There are numerous benefits for both financial institutions and their customers to take advantage of the P-to-P space."

MasterCard members can enhance their customer value proposition by implementing this system, offering their cardholders added convenience and flexibility. The service also enables financial institutions to acquire new relationships among non-customers who receive an e-mail money transfer using the bank-branded CertaPay platform.

The P-to-P platform also has the potential to assist issuers in making international transactions easier and more efficient due to MasterCard's worldwide payment network. MasterCard's alliance with CertaPay is one way to ensure that members who wish to offer P-to-P services to their customers can take advantage of this solution at a substantial discount.