Visa and AmEx Say: Forget PayPal!

Let’s say you go to a garage sale and find the perfect couch. You really, really want it. But you have no cash. If you and the seller both happen to have PayPal accounts, you could arrange to pay online.

But let’s say the seller has never heard of PayPal. Chances are both of you have a Visa or an American Express card in your wallet. Now, Visa and American Express are introducing services to accommodate such situations.

Visa will call its service “Personal Payments.” AmEx’s is called “Serve.”

In the Visa system, buying the couch will require you to go online or use a mobile app to enter the seller’s 16-digit credit card number, e-mail address or cell phone number, according to a Visa press release. When the payment goes through, both sides get a confirmation e-mail. AmEx cardholders also can access Serve through Facebook, according to a company press release.

Serve, which is up and running now, can be set up to pull money from customers’ bank accounts, debit cards, prepaid debit cards and credit cards. Personal Payments must be linked to a bank or credit account, according to Visa’s press release, and will be available by the second half of 2011.

“It’s a flexible, easy to use platform,” Dan Schulman, president of business development for American Express, said in a press release.

For years, PayPal had been the go-to place for individual buyers and sellers to go for account-based payments. That changed in the last year as companies including Square and AppNinja introduced apps and card reading attachments that turn smartphones into credit card swipe machines. (See our story about Square here, and read about AppNinja here.)

But many of these systems have issues. People have complained that PayPal can be difficult to use. A commenter to Credit.com says that Square’s $100 limit per transaction is annoying, and calling the company to talk to a real human being is next to impossible.

With their colossal global networks, and with enough employees to fill a good-sized city, Visa and AmEx are hoping they can use their huge size to beat PayPal and its smaller upstarts in creating person-to-person networks that can operate almost seamlessly.

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Image: kathyinozarks, via Flickr.com