There are two ways that consumers can use their debit card accounts to send money.
A caveat: these methods only apply to general-purpose-reloadable prepaid debit cards. I am not writing about gift cards, cards that hold store credit, or funds received as an incentive for signing up for a new service. The techniques here work for FDIC-insured accounts, including prepaid debit cards as well as other bank accounts.
First, you can send money with an add-on service that interacts with your bank account.
Venmo, Pop Money, and Square's Cash App will let you send money from your bank account to a bank account of one of your friends. These are bank-to-bank transfers routed through a national ACH network. If you are willing to wait, they will send your money for free. These companies must pay a slight fee (less than 10 cents) to the ACH provider. As the networks charge a higher price for immediate settlement, each of those services asks the consumer to pay a modest fee for instant payments.
Google, Apple, and most of the smartphone providers have a payment service, too.
Usually, it would be next to impossible for a consumer to set up an ACH payment. Historically, banks have done the behind-the-scenes work to orchestrate these transactions. Venmo and its competitor services use application programming interfaces (“APIs”) to facilitate the communication between itself and the banks on both ends of the transaction. Venmo uses Plaid. Square Cash employs its in-house API developers.
Second, some banks have bundled money transmission services inside the overall basket-of-goods in their traditional account.
Don't expect to be able to use Zelle. At this moment, Zelle does not work with prepaid debit cards.
Zelle will not let you send money internationally. Very few institutions offer accounts with this capacity
If you don’t have a better option, you can go to a Western Union, input the 16-digit number on the face of your debit card, and send money from your account to an international destination. That is hardly convenient, and additionally, sending funds at Western Union or MoneyGram can be very expensive.
Working with Venmo
Here are some debit cards that work with Venmo:
- The Fancard by Sunrise National Bank
- Cards from Card.Com
- The Varo Money Card is not a prepaid debit card, but it serves some of the same markets. It works with Venmo, Cash, and PayPal Instant Transfer. The Empower Bank account (not a prepaid debit card either) works with Venmo and Apple Pay.
Be aware that some of the most well-known prepaid debit cards do not work with Venmo:
- Green Dot
- Rush Card
Venmo card is not a prepaid debit card.
It is always important to posit how a person might choose to use this function. Certainly, sending money will always be a function of p2p payments. However, I see a place for B2P payments. Many workers want to receive funds at the end of their workday on Friday. Otherwise, they face the prospect of going all weekend without any money. True, it is the exception to the rule that a Friday payday would not serve the purpose of compensating for work that was finished during the prior week. That is generally the case with full-time staff. It is less often the case that pay periods are staggered among contractors. In the construction industry, at least in the informal sector within construction, many workers expect to receive pay for Friday work at the end of Friday. The construction boss has to have cash or a paper check on hand at the end of the day. If it is a check, then many will want the money no later than 3 pm, so that the worker has time to travel to a nearby bank branch or checking cashing location to cash the check. Businesses would do well to make these transfers electronically, if only for the benefits of safety and record-keeping.
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