If you respond, “I beg your pardon,’’ then it might be a good time to catch up on the latest technology. Pay-by-phone systems are gaining popularity, especially with young people. Twenty-somethings, preferring debit cards to traditional banking methods, find it tricky to transfer funds to friends, merchants, and service providers without cash and checks. Enter the pay-by-phone system. Promoted as “secure” and “free,” these systems provide consumers and businesses the cashless, card-less convenience of quick and easy payments. Providers, in turn, stand to gain market recognition, email and consumer data, as well as income from fee-based upgrades to premium products and other services. As with any new technology, users and businesses should be aware of potential security issues and roadblocks of emerging mobile payment systems not entirely mainstreamed. Here is a snapshot of three innovative mobile systems:
Venmo: Provides friend-to-friend money transfers via mobile phone numbers, email addresses, or Facebook accounts. Users create a Venmo account for instantly sending and receiving funds. A $299 a week transfer limit applies with an option to increase that limit to $2,999 per week with identity verification. Benefits include on-spot reimbursement for shared expenses like restaurant tabs and cabs. Users also enjoy the social aspect of linking Venmo to Facebook to share transaction status and comments in their newsfeeds. Venmo is free to when linked to a bank account or major debit card; however, there is a 3% transaction fee when linked to a credit card or non-major debit card. Venmo does not allow merchant transactions for goods and services.
Square Cash: Square Cash provides individuals absolutely free friend-to-friend transfers. It’s business version, Cash Pro, charges businesses a low 1.5% fee per transaction to accept payments for goods and services. Similar transfer limits ($250/week; $2,550/week after verification) apply to Square Cash personal users; however, there is no limit to the amount Cash Pro business users can accept. With Square Cash, users create a “cashtag” (ex. Cash.me/$JoeCool) to be shared online or off and can be paid with the Square app or on an established cash.me page. Funds are deposited directly to user bank accounts in 1 to 2 business days. Users can also send and request money via email and a debit card or with a new Snapchat feature.
Google Wallet: With a Google account, any user can set up a Google Wallet and pay in stores, online, or to anyone in the US with a Gmail address. Credit cards, debit cards, loyalty cards, gift cards and coupons can be used on most Android and iPhones for payment in stores or online. Android phone users have a tap and pay option that is available for use at participating stores. Spending transactions are essentially free, but there is a 2.9% fee for individuals to transfer money to a Google account balance from a credit or debit account. Transfer limits are higher for Google Wallet at $10,000 per transaction and $50,000 over a 5-day period.