Your daughter calls from college to say she needs $200 for textbooks -- in the next 15 minutes, if you please. You need to reimburse a friend for movie tickets and don't want the hassle of mailing a check. You owe your golfing buddy on a friendly wager, but there's no ATM nearby.
No worry. If you have a cell phone -- and who doesn't these days? -- just peck out a few numbers and the money will be delivered in seconds. Welcome to mobile payment, a person-to-person money transfer system.
PayPal, MasterCard, Amazon and several other companies have introduced new mobile payment services. And more are sure to follow as consumers discover the potential of the technology, says Beth Robertson, director of payments research at Javelin Strategy and Research, who recently authored a report assessing the future of account-to-account transfers.
"Mobile payments are just taking off in this country," she says. "Right now, it's almost impossible to project how popular they will become."
Mobile payment is in part a descendant of technology developed a decade ago by PayPal to facilitate eBay transactions. Eventually, people began using the PayPal Web site to send money to friends and family members, especially those overseas.
In 2006, PayPal introduced PayPal Mobile with high hopes. Initially, few U.S. customers embraced it, partly because of fears about the security of mobile transactions. At the time, PayPal president Scott Thompson wondered whether Americans were ready to use phones to initiate transactions.
Last year, when other companies began eyeing the U.S. mobile market and smart phone applications became common, PayPal tried again. It entered into an alliance with S1 Corp., a developer of banking software, to market a P2P payment service through local banks, the first of which is Mercantile Bank of Michigan. That system, MercMobile P2P Payments service, is scheduled to launch in the first quarter of 2010. The bank says its customers will be able to send money from a mobile phone to any PayPal user by entering the recipient's e-mail address or phone number. If the recipient doesn't have a PayPal account, he or she will be prompted to create one. The bank says it won't charge to send or receive money, at least in the beginning. However, S1 and PayPal say they expect that other banks may levy a fee when the service rolls out later this year.
Hot on PayPal's heels is Obopay, a 5-year-old California company backed in part by Nokia, the giant mobile phone maker. Obopay pioneered mobile money transfers in India, Africa and other countries where the telephone and Web infrastructure is poor and fewer people have access to conventional bank accounts. Recently it began making mobile P2P available in the U.S. After you sign up for an account on the company's Web site and get a PIN, you use a text message, iPhone app or mobile Web browser to send cash to any mobile phone user. Recipients choose whether to put the money in their bank accounts or on a payment card.