PayPal enables Instant Transfer to banks for faster cash access

  • PayPal is rolling out a capability that allows PayPal users to instantly transfer money sent to them via PayPal into their bank accounts, a service enabled through the company’s partnership with JPMorgan Chase, according to a PayPal blog post.
  • “Instant Transfer to bank,” which uses The Clearing House’s Real Time Payments network, already is available to U.S. consumers, and will be accessible to U.S. businesses in the coming weeks, with an eventual international rollout also planned, the blog post stated.
  • PayPal said Instant Transfers to banks and debit cards come with a 1% transaction fee, which is capped at $10. (Its standard, usually slower, transfer is free.) Transfer time varies by bank, and debit card transfers may take up to 30 minutes. 

Dive Insight:

This offering is the latest example of how PayPal’s partnerships with traditional financial institutions and payment card companies are paying off. It first partnered with JPMorgan Chase in 2017, and the companies have looked beyond just broadening acceptance of PayPal with Chase merchants to enable new kinds of services for both cardholders and retailers.

As PayPal delivers the Instant Transfer to bank capability to businesses, it will provide greater flexibility to merchants, including online marketplace sellers, that use PayPal to get paid by their customers. Businesses will have cash on hand more quickly to satisfy whatever needs they may have, which can be especially critical for the smallest businesses.

A number of companies have been increasingly focused on providing services to help the small merchants on their platforms gain greater financial flexibility. For example, last year Payability launched a business debit card that gave marketplace sellers faster access to their payouts from sales, and Square unveiled a business debit card that allows merchants to fund business expenses without having to wait for sales to clear. PayPal also already has dabbled in this area, with a Funds Now capability for instant payout on sales.