The new app allows a user to send a personal payment for free as long as its tied to a PayPal balance or a bank account. If users fund the payment through a credit card, it costs 2.9 percent plus 30 cents and the payer, or sender, pays. Payments overseas incur a fee of up to a few percentage points depending on whether it utilizes a credit card.
This is, in some ways, just a simple onramp for PayPal to get people to send money through Facebook. Instead of getting people to go through PayPal, they can just initiate payments in the place where people spend a lot of their free time. But again, it’s just an onramp. Payments ultimately have to be completed by signing on to PayPal. You also have to enter in a user’s email address because payments are tied to an email. Still, it’s an obvious move to tap the 800 million members of Facebook. And if it can get people to load up their PayPal balances more, it can mean extra income from interest on those funds.
But it’s not just about exchanging money. The Send Money app tries to be social by allowing users to send an e-card with a message that can include a picture or YouTube video (s goog). Or users can just send money directly. Either way, the app will post a note on the recipient’s wall that they’ve received a payment, though any message or amount of money paid is kept private.
The idea is that a lot of people send e-cards; 500 million each year according to PayPal. Now you can throw in some cash with that. For a lot of occasions, I’m not sure I want to send straight up money. That seems even less sentimental or meaningful than just sending a gift card. But I can imagine this is better for paying people back for things. And it shows that PayPal is intent on being everywhere that people are. It’s trying hard to extend its payment infrastructure into offline stores too. The bottom line is PayPal is going where the action is and it’s not just online or mobile, it’s social and local.