Walmart Inc. customers will soon have the option to pay directly from their bank accounts with instant transfers for online purchases. The enhanced feature is a flash point in the escalating tensions between merchants and the card networks setting the fees for payment processing.
The world’s largest retailer has offered pay-by-bank through Walmart Pay since earlier this year. Until now, the transactions were akin to digital checks and took roughly three days to finalize when being processed through The Automated Clearing House, the same network often used for bill payments or paycheck deposits. Soon, customers opting for pay-by-bank transactions will see the purchase reflected in their bank account balance instantly – and Walmart will receive the funds immediately.
The consumer advantage of instant pay-by-bank over debit cards is avoiding stacked pending transactions. For customers carrying low balances, pending transactions can open them up to the risk of overdraft or non-sufficient funds fees from their bank, according to Jamie Henry, vice president of emerging payments at Walmart.
In the US, most consumers carry credit or debit cards which offer convenience, fraud protections and, in the case of credit products, rewards programs. However, frustration has mounted among merchants over fees they pay for card processing to banks and networks like Visa and Mastercard.
TLDR/
- Retailer partners with Fiserv for upgraded pay-by-bank option
- Aims at reducing consumer risk of NSF or overdraft fees
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