MasterCard Send debuts as faster alternative to ACH payments

| by Will Hernandez
MasterCard Send debuts as faster alternative to ACH payments

Earlier this year, the Federal Reserve issued a plan for collaborating with payment industry stakeholders to find a way to enhance the speed, safety and efficiency of what has become an outdated and inefficient system. 

One of the Fed's desired outcomes is to improve the speed by which payments clear, particularly those that involve the ACH Network. Though the industry is still a few years from solving that problem, MasterCard Tuesday introduced a system that enables various payment industry stakeholders, including merchants, to sidestep ACH and use the established debit card networks to send funds to consumers in about the time it takes to complete an ATM transaction.

MasterCard Send is being touted as a first-of-its-kind service to enable businesses, merchants, governments, nonprofits and issuers to transfer funds to consumers' checking accounts via any U.S. debit card, including non-MasterCard debit cards. 

Send is now live in the U.S., but MasterCard plans to expand it overseas to enable the aforementioned entities to transfer funds into mobile money accounts and cash agent outlets in addition to debit cards. 

"It's a platform [designed] to really make sure we're meeting consumers' needs and also providing additional benefits to banks, businesses, governments, and pretty much anyone who needs to send funds to consumers," Barb King, group head in MasterCard's payment systems integrity group, told Mobile Payments Today in an interview Friday. "This is connecting those entities with the consumers themselves quickly, safely, and in a manner we think consumers have clearly demonstrated that they're comfortable, and that's through their existing debit card accounts."

MasterCard at the moment is focusing on business-to-consumer disbursement payments with Send and King laid out some initial use cases for the system. 

Berkshire Hathaway Travel Protection is one of the first companies to use MasterCard Send to reimburse consumers for travel insurance claims. If a traveler runs into an unforeseen event such as stolen luggage, Berkshire now has the ability to immediately reimburse consumers once they file a claim. 

Auto insurance adjusters also could benefit from Send. Instead of cutting a check for an insurance payout, an adjuster could swipe a driver's debit card on a mobile point-of-sale terminal and the funds are available almost immediately. 

"We see this as a great way to help organizations like insurance companies who are hearing from their own consumers [about the slow speed of reimbursements]," King said. "Their customers are saying they don't want to wait seven days to get a check. 

"Anything that takes more than a couple of days is inefficient."

MasterCard also announced as an initial partner. The subscription-based online shopping site will use Send to deliver rebates and cash-back payouts.

MasterCard charges businesses the equivalent of debit interchange fees for each Send transaction, according to King.

MasterCard will eventually position Send for person-to-person payments, but when it does so, will face a market that is flooded with various options for such transactions. 

Venmo is all the rage with millennials, and Facebook in March announced its plan to add P2P transfers through Messenger via a debit card. 

MasterCard, however, believes its name recognition, along with its partnerships with banks, can give it an advantage over companies that lack the history and reputation it has in payments. 

"We certainly hope it does," King said. "When you look at most of the consumer studies that I'm aware of, consumers are more comfortable sharing their data with their bank. We think that's an added benefit to this. That's an important point to bring out. It certainly adds to what this brings: the speed, reach, safety and security." 

Watch the video below that explains MasterCard Send: 

Topics: Card Brands, Handsets / Devices, Mobile Banking, Money Transfer / P2P, Retail

Companies: MasterCard

Will Hernandez
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of, he spent two years as the content manager for, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago. View Will Hernandez's profile on LinkedIn

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