Mastercard, Visa Swing Focus Onto Peer-to-Peer Operations

Some regarded it as one of the biggest failings of the mobile payments movement so far: the lack of peer-to-peer (P2P) operations.

Some tried to make a market out of this lack, and it was commonly wondered just when the major firms were going to step in and fill this almost inexplicable hole in operations.

Reports suggest that that time has come, with Mastercard and Visa joining together to push the clearXchange network forward and bring P2P operations to member banks.

Essentially, the new partnership will allow anyone with a debit card issued in the United States to use either Visa Direct or Mastercard Send to move funds from one account to another, as long as the account holder in question has an account with a clearXchange member bank.

Right now, there are only a comparative handful of such banks, including Wells Fargo, Bank of America, and several others.

Given that the annual P2P spend in the United States was better than $540 billion in just 2014, the notion of turning a mobile payment system into a P2P platform—and thus taking a percentage of those payments for processing fees and the like—represents a major market in the making.

Reports further suggest that mobile P2P is already a growing part of that picture, with 30 percent of P2P expected to be paid by mobile devices by the end of this year.

There’s trouble afoot for Visa and Mastercard here, however, as there are also card networks and social media operations like Facebook all out to get a piece of this market.

Though Visa and Mastercard have the right idea about getting into the mobile P2P market, and will certainly have some advantage in terms of their raw name recognition factor (not to mention the greater perception of security that comes with it), there’s still one big problem.

Visa and Mastercard are coming very late to the mobile P2P party, and it’s entirely possible that many of the potential users of such a service have already turned somewhere else for their P2P needs.

Still, there could be some room left here, particularly if it can reach those who haven’t had a solution in place already. Only time will tell just how much of a market that is, but in the meantime, it means a possible big hit for Visa and Mastercard.