Popmoney – Person to Person Payments

May 18, 2011

Paying your friends and family money you owe them may have gotten easier recently.  My experience with it started when I emailed my friend John last week to ask him if he had a PayPal account so I could pay him the $20 I owed him.  He didn’t have an account with PayPal so said to just give him the cash the next time I saw him.

Cash Payment Alternatives

As I’ve mentioned, we put most of expenses on our Blue Cash card, or other card when a store doesn’t take American Express, so I never really carry any cash.  I told John that chances were I wouldn’t have any money on me the next time I ran into him, or the next time, or the time after that.  I could have mailed him a check but I use those even more infrequently than cash, we only have a few checks left and they still have our old address from before we moved.

Visa recently announced the upcoming ability to make person to person payments using your Visa card but the functionality isn’t available yet.  Based on their press release, it sounds like they’re using technology from two of the top person to person payment tools, ZashPay and Popmoney.

Person to Person Payments

So I decided to try out Popmoney since my local bank offers it as a service to it’s customers.  I’ve actually talked about it before when I covered how to send money with your phone but in that article the focus was on using your cell phone.  I first heard about Popmoney when FNBO Direct started offering the person to person payment service, I think they may be the only one of the high yield savings accounts that are offering the option right now.

The pop in Popmoney stands for “Pay Other People”, it’s a service that was built by a company called CashEdge Inc.  All you need to send someone money is their email address or cell phone number. 

pop money

When you start using the service you add in the person you want to send money to as a contact.  As you can see here, it asks what method you’d like to use to send them money.

I don’t know anyone’s bank account number other than my own so I doubt I’ll ever use that option.  The text message feature is nice but not everyone has a text plan setup on their phone and some people only have a limited number per month so I figured I’d just go with the email option.

Once you setup someone as a contact you fill out the form below to actually send the money.  Pretty standard form, you choose which account to send the money from, how much to send, when to send it, and you can customize the message that notifies them they have money.

pop money

Claiming Payments

I didn’t know how the claim process works at the time I sent the money but I’ve heard from John since he recieved my email.  Apparently in order to claim the money and he has to setup a profile with Popmoney and provide his bank account number and routing number so they can send him the funds.  If his bank also offered the Popmoney service I don’t think he’d need to give his banking info to Popmoney, they’d just facilitate the transfer between the two banks.

Popmoney Fees

The fee for sending money might vary from bank to bank but in my case it was a flat fee.  They charge $1 for standard delivery (2–3 business days) and $3 for Express Delivery (1 day).  If you’re only sending a small amount of money then the $1 fee can turn out to be a larger percentage of what you’re sending. 

However, if you’re sending hundreds or thousands of dollars then Popmoney will cost you less than using PayPal.  That’s because PayPal charges a percentage of the amount you send and Popmoney only charges you a flat fee for the transaction.  Again, that’s how it works at my bank, you should check with yours before sending a large amount, just to be sure it’s a flat fee. 

There is a limit to the amount of money you can send with Popmoney but it’s pretty high.  The table below shows what the limits are for my bank.  

pop money 

Not all banks will offer the Popmoney service but it is becoming more popular and the network of banks offering the service is growing. As I mentioned earlier, ZashPay is another alternative p2p payment option you can check out and Visa should be making p2p payments via your credit card available later in the year.

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Ben

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Ben
Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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