Visa’s new personal payments system – a gamechanger?

Visa (NYSE: V) announced a new service today that allows someone who holds a Visa account to receive and send funds to any other Visa account holder. From the press release:

Bank customers of participating financial institutions will have the option to select a Visa account as the destination for funds when making a personal payment. By simply entering the recipient’s 16-digit Visa account, email address or mobile phone number, consumers can send funds directly from their bank account to a recipient’s Visa account. This makes sending money to a niece for her birthday or to a son in college simpler, faster, and more convenient than before.

The goal is to “eliminate the inefficiencies of cash and checks for payments between individuals.” The backbone seems to come from two other companies that Visa is partnering with. Once is publicly traded, Finserv (Nasdaq: FISV):

Additionally, Visa today announced strategic product agreements with CashEdge Inc. and Fiserv, Inc. (NASDAQ: FISV), two of the leading providers of electronic person-to-person payment, account transfer and bill payment services to U.S. financial institutions. Through the agreements, CashEdge and Fiserv will have access to VisaNet, enabling them to integrate the Visa personal payment service into their respective person-to-person platforms – Popmoney® and ZashPay®. This will allow a participating bank’s customers to send money directly to a Visa account.

As Leena Rao at TechCrunch points out, this could very well give eBay’s (Nasdaq: EBAY) PayPal a run for its money:

Previously, Visa’s personal payments was offered by financial institutions outside the U.S. but the availability in in the U.S. is a big deal, considering the popularity of PayPal. Of course, the virtue of using PayPal is that you don’t have to have a Visa account to use its payments service.