Stripe, an e-commerce payments provider for on-demand services like Lyft and Instacart, is rolling out a new feature today called Instant Payouts, which will allow businesses to pay out service providers more immediately. That means Lyft drivers can choose to cash out at the end of their shifts and receive their money on the same day. Typically transferring funds takes 2-3 days.
Like many money-handling institutions, Stripe is trying to move money faster. It’s doing that through its relationship with MasterCard and Visa, both of which are providing the rails for moving this speedy new money-transfer system. The credit card companies are increasingly striking deals like this. Recently, they both entered an agreement with PayPal that could result in quicker settlements, though nothing has been announced yet.
Such negotiations come as the Automated Clearing House, a financial network that handles a large portion of debit and credit card transactions, is starting to offer same-day payouts. However, the network will continue to move money in batches, making it not as “instant” as what MasterCard and Visa appear to be offering.