Visa International is developing an electronic service to drastically cut the cost to consumers of moving funds across national borders.

The service will let consumers transfer funds from their Visa accounts to businesses and individuals in other countries.

It will initially be available only outside the United States, possibly as early as next summer.

Visa officials said they were reacting to a European Commission report issued last year that said cross-border consumer payments were inefficient and carried inordinately high fees.

The report urged banks to find a way to lower the fees and speed up the process.

Consumers now pay fees of $25 or more to send a check to a payee in another country. The check can take two to three weeks to clear.

"The idea was that the Visa system routes money between banks all over the world, and there was no reason why Visa-Net couldn't be adapted to offer a [consumer] money transfer service," said Joanna Henderson, a spokeswoman for Visa in London.

Visa estimates the size of the market at $40 billion, including small-dollar payments from individuals to individuals, and from individuals to companies like hotels or shops.

Called the International Money Transfer Service, it could also help banks make money on cross-border consumer payments, Visa officials said.

Bankers say they operate these services at a loss, and that the high fees reflect the paperwork and labor costs associated with currency conversion and administering the cross-border checks.

John Chaplin, head of market development at Visa in London, said the service could push up volume and help banks make money at the service.

Visa officials said that members may begin to offer the service in Britain initially, and later in the rest of Europe, the Middle East, and Africa.

The service will bring Visa into competition with other bank payment networks, such as Swift.

Today, when a consumer sends a check to another person or a store, the banks involved wait until the exchange rate is favorable before they convert the currency.

The service, as envisioned, would allow a Visa member to transfer from his or her account to another Visa cardholder's account. A bank customer who does not have a Visa card might also be able to send to a Visa account or receive money from a Visa account as long as both parties' banks are Visa members.

Current Conversion Rate

The customer would specify the amount to be transferred and the bank would then quote an exchange rate, based on its current retail rate of conversion. The paying bank would enter the transaction into the Visa system, and the receiving bank would transfer the credit to the appropriate Visa account.

The cross-border transactions would take about six banking days to clear.

While Visa could authorize a payment in seconds, the bank has to make sure the money is there, said Ms. Henderson. "Realistically, that's the amount of time the banks said it would take," she said. "This is not for emergency funds."

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