When you think peer-to-peer payments, you probably think PayPal. But there’s one big advantage that other services, like Square Cash, have had over them for a while now: the ability to cash out instantly. PayPal just announced their plan to offer this feature, too.
In the announcement, the company’s executive vice president, Bill Ready, said:
Today, people are using PayPal’s P2P services, including Venmo and Xoom, to send and receive more than $7 Million an hour to their friends and family...PayPal users in the U.S. will soon be able to instantly transfer money to their bank accounts via eligible debit cards linked to their PayPal account. We expect that funds will typically be available in your bank account in a matter of minutes, although some banks may take up to 30 minutes. Our beta of this is now available to select PayPal users and will be made available to all U.S. PayPal users with eligible Visa or Mastercard debit cards over the coming weeks and months.
The instant transfers will cost $0.25 per transaction. Typically, transfers have been free, but they also take a couple of days, and in our fast-paced, real-time world, that’s just too long.
Services like Square Cash or the soon-to-launch Zelle already offer this advantage. Many major banks—Chase, Ally, and Wells Fargo to name a few—have already partnered with Zelle to offer real-time peer-to-peer payments for their customers. So if you’re an Ally customer, you’ll be able to use the service from within their app or directly from the Zelle app. Banks can set their own fees with Zelle, but “but none have announced plans to charge customers for bank-to-bank transfers,” according to the New York Times.
Paypal and Venmo’s new feature will be available to the majority of cardholders, PayPal says, with the exception of some smaller institutions. You can’t opt into the beta, but if you’re part of it, you’ll now see the option via the mobile or web app. Venmo will follow with their own beta, and then all PayPal and Venmo customers in the U.S. should have access in the coming weeks, according to PayPal.
