Visa Unveils Mobile Money Transfer Pilot and New Prepaid Card Options

Visa (San Francisco) and U.S. Bank (Minneapolis) will launch a mobile money transfer pilot that would allow Visa cardholders in the U.S. to use their mobile phones to securely send funds to other Visa accountholders. The program is due to begin by the end of 2008 and is being called the first such trial in the U.S. to transfer money between Visa accounts.

Visa cardholders in the pilot will be able to initiate a money transfer using a mobile browser to access a secure interface. The transferred funds will then be credited directly to the recipient's Visa account. The recipient can access these funds via cash withdrawal at an ATM or by making a purchase at any merchant in the Visa network, subject to the funds availability policies of the recipient's bank.

Phase 1 of the pilot will enable domestic money transfers and will include several Visa issuers, including U.S. Bank, and up to 6,000 Visa accountholders. The second phase, scheduled for the first half of 2009, will broaden the pilot to cross-border money transfers.

The money transfer service will operate using Visa's mobile platform which is described by the company as a suite of technologies that enables Visa, its clients and the mobile operators to engage in trial activities and develop commercially scalable mobile services.

According to Bill Sheedy, president, North America, for Visa, this is part of the company's shifting focus on new channels. "We placed a big bet on debit in the 90s," he told attendees at Visa's Innovation Brief in New York today. "Now, our focus is on new channels—mobile, prepaid and money transfer. At its core, Visa is a technology company. We want to drive programs to lower fraud and enhance consumer payments."

Visa has been working in the prepaid card front in an effort to access the millions of financially underserved people in the U.S. and elsewhere. The most recent announcement involves an enhancement to the Visa ReadyLink prepaid reload network which will enable consumers to add funds to eligible Visa prepaid cards at participating envelope-free ATMs. The service will roll out later this fall.

ReadyLink allows users to reload their cards at more than 7,000 participating merchants in the U.S., providing an alternative to cash and checks for them. Adding the ATM reload functionality, says Visa, is yet another convenience for customers. Visa claims its partner financial institutions and ATM owners receive an opportunity to provide yet another service to customers and noncustomers. Plus, the transactions go through their existing VisaNet connection.