Paypal is very active. This service will be in direct competition with such services as Interac Email Money Transfer in Canada, and Online ACH in the US.

Relevance to Bankwatch:
Transaction revenue erosion.

Print Story: PayPal offers text message payment service on Yahoo! News

PayPal, the world’s largest supplier of online payment services, is preparing to offer a service for consumers to make purchases or money transfers using simple text messaging via mobile telephones, the company said on Wednesday.The service, known as PayPal Mobile, will be launched in the next couple of weeks in the United States, Canada and Britain, a spokeswoman said. Other markets worldwide will follow.

“PayPal is going to be launching a mobile payments product,” PayPal spokeswoman Sara Bettencourt told Reuters.

Word of the service had leaked out when bloggers found links to test pages on PayPal describing it.

Details of the service are on the PayPal Web site (https://www.paypal.com/cgi-bin/webscr?cmd=xpt/mobile/MobileSend -outside).

Over time, the company may look to extend the service to the more than 55 countries and regions where PayPal is registered to transfer funds online, Bettencourt said. However, she stressed that PayPal has no specific plans yet to do so.

While designed to make online payments more convenient for the nearly 100 million existing PayPal users, the move to offer a mobile payment service holds out the prospect of reaching vast markets in the developing world where phones, rather than computers, are the main way to connect to the Internet.

PayPal Mobile will offer customers two options for transferring funds, be it for gifts or purchases, by phone to anyone they choose — individuals, stores or financial institutions.

Payments can be sent over a phone via text message or by calling an automated customer service system and using voice commands to transmit funds, according to PayPal’s site.