Realtime Push Payments Can Increase a Bank’s Revenue, Mastercard Says

As gig workers and small businesses continue to grab a larger market share of the economy, more banks and FIs might want to consider card-based push payments as a way to grow their debit business.

This suggestion comes courtesy of Mastercard. “And by growing their debit business, realtime push-payments can help banks generate more revenues,” said Shari Krikorian, SVP of Push Payments at Mastercard told Bank Innovation. 

Krikorian explained that in a recent analysis conducted by Mastercard, the company found that a customer whose bank offered the realtime push payment feature transacted 17.1 more times — or 16% more — than one without the capability. That customer also spent 46% more than over the 4-month post-activation period. When it comes to small businesses, the report found that those that received payments via realtime push spent 46% more on the cards on which they received the payments.

Mastercard has its own version of realtime push payments, which it calls Mastercard Send. Started over three years ago, Mastercard Send currently serves customers like payments platform Stripe and insurance company Allstate, among others.

Mastercard Send isn’t consumer-facing, which means the customer doesn’t see that they are using it. It is also brand-agnostic, which means it can work for other card networks like Visa or American Express. Visa has its own version of push payments, which it calls Visa Direct.

The way it works in the case of Mastercard Send is through APIs with the P2P platform on one end and a card network (either Mastercard or not) on the other end, Krikorian explained. This network is connected to the bank. For example, rideshare service Uber would be the sender, and the driver would be the receiver.

Note that realtime push payments are not the same as realtime interbank payments or faster payments rail, an extensive effort many banks are currently undertaking. The latter refers to a system that allows transactions between the banks of two businesses, whereas realtime push refers to payments from merchant to clients.

“Think of it as B2P payment, where the merchant is paying the consumer, instead of the other way around,” Krikorian said.

In June, Mastercard made the product live in the U.K. With a report published yesterday, the card network is hoping to educate more merchants on integrating push payments in their offerings.

In a case study on Google Pay, Mastercard found that first-time customers with realtime push pay used their cards 6.5% more times than those without, and spent 13% over the 4-month post-activation period.

See how Mastercard Send works here and read yesterday’s full report here. 

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