MasterCard has jumped on the P2P movement with its new service, MasterCard Send. While MasterCard has not gone into a lot of detail regarding the technical aspects of the service, we do know that it is built on a P2P-based system as part of the Federal Reserve’s initiative to speed up the money transfer system, which still relies on the 40+ year old Automated Clearing House (ACH) method. With the ACH, transactions are bunched in predetermined intervals. ACH transactions are slow, taking 2-5 days to clear, and are not ideal for the current financial world. Luckily, Bitcoin offers near instant payments at incredibly small transaction fees. MasterCard Send is not based on the Bitcoin protocol, but it does use P2P technology to allow the facilitation of “fast transactions.”
The idea behind Send is simple. Users will have the ability to “seamlessly send and receive funds from friends and family typically within seconds through providers including issuers, money transfer operators, merchants and more.” Users of the service will also be able to send money from card to card (non-MasterCards included.) This is a big step up for credit card companies in developing new services. There aren’t fees associated with using the Send Service, but it does require a debit card through MasterCard. Businesses that use the service will have the option to charge customers a fee for the service if they choose. Unlike Bitcoin, the transactions won’t clear within an hour, but rather a day. For transferring fiat, this is still much faster than the current wait time of ACH transactions. Users of the service should be able to see the transfer instantly, and should have access to the funds within 24 hours.
The P2P payment industry is expected to grow considerably in the coming years; Bitcoin, as well as P2P services, will likely increase in popularity while companies like Western Union will need to adapt to survive. Sending money to anyone in the world will get easier as more services enter into the industry. While the Send service can be used for P2P payments between friends or family, it is designed to offer businesses a way to reimburse customers without having to send a check. MasterCard Send is not currently available for individuals, but only businesses that would want to apply for the service. There will likely be a lot of regulation oversight regarding this new program, much more than Bitcoin currently faces.
For individuals looking for a P2P method of sending funds to anyone in the world with minimal fees, Bitcoin remains the ideal choice. MasterCard has joined the P2P movement and has attempted to build a service that will provide businesses with a better method of sending funds to customers. In a statement they wrote:
“MasterCard Send is the only personal payments service that can reach virtually all U.S. debit card accounts and enable funds to be sent and received typically within seconds – far superior to existing solutions that either limit transfers within a closed-loop network or involve ACH, which can take several days for funds to be received.“
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