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PayPal Takes on Venmo With Next-Day Money Transfers

by Jacob Kleinman | July 8, 2014July 8, 2014 10:00 pm PST

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For a long time PayPal was the best and often only way to quickly and easily transfer money online, but the eBay-owned company’s four-day waiting period is starting to feel painfully slow compared to speedier services like Venmo (which eBay also happens to own). Today PayPal is finally catching up with a new Next-Day Settlement (NDS) option, though for now it’s limited to business accounts.

NDS is launching as a pilot program this month in the U.S., where eligible businesses will be able to transfer money from a PayPal account to a bank account overnight instead of waiting as long as four full business days. It looks like PayPal has handpicked the companies it’s inviting to try the pilot program, so if you use the service for your business keep an eye out for a notification this month.

PayPal has definitely struggled to stay relevant in the face of small upstarts like Venmo, and the company even offers its own credit card reader to compete with Square. Offering next-day money transfers for businesses should be a good way to hold onto those accounts, but if the company wants to stay competitive it may need to offer a similar service for individual customers in the very near future as well. Then again, with eBay running both companies it might make sense to position one as a business service and another for consumers to avoid too much overlap.

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Jacob Kleinman

Jacob Kleinman has been working as a journalist online and in print since he arrived at Wesleyan University in 2007. After graduating, he took a...

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