MasterCard is promoting a tempting new offer: Instead of using checks or wire transfers to send money, U.S. customers can soon text the funds directly to another person through their cell phones. Dubbed MoneySend, the new service promises to “make it faster, simpler, and more convenient for people to send money to each other using the MasterCard network,” according to Art Kranzley, chief emerging-technology officer at the Purchase [N.Y.] company. The question is whether it will finally conquer consumer resistance to mobile banking.
While an estimated 350 million people worldwide now use their cell phones to shop, bank, or transfer money, according to consultancy Edgar, Dunn, Americans have been slow to adopt the technology. One reason is the need for special software on handsets. Another is a persistent worry about the security of moving money around in the wireless realm. “Person-to-person payments are a huge unexploited market in America,” says Edgar Dunn director Samee Zafar.
MasterCard is trying to assuage such concerns by using a system that’s similar to PayPal, which revolutionized e-commerce in 1998 by creating a password-protected site to transfer funds online. With MoneySend, announced on May 13 and launching later this month, customers will use their credit card, debit card, or bank account to sign up for a prepaid account online. They can then transfer funds by sending a text message to a recipient, who must then register to choose which account they want the funds deposited in. The service will work on any phone, thanks to a partnership with Obopay, a Redwood City [Calif.] company that specializes in money-transfer technology. In its initial launch phase, consumers will be able to transfer anywhere from $1 to $500 for a small fee. MasterCard expects some partner banks may waive those fees as an inducement for customers to sign up.
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