The internet has truly changed how we manage day-to-day activities – from applying for a job to setting up appointments with our doctors.
And now, how we exchange money.
In 1998 a small e-commerce site by the name of PayPal came into existence to help manage payments and money transfers through the internet. Because of its reputation and security, it was soon bought by online auction site, Ebay. PayPal charges a fee per transaction that is based on the amount exchanged. It is probably the most widely used online payment system.
Today, people still view online security as a top priority when exchanging money over the internet. But they aren’t as fond of the fees that go with a service like PayPal. Enter in: Google Wallet, Dwolla and Serve. These are just some of the new online payment systems available to consumers.
I wanted to compare these four to one another and offer you a chance to see their similarities and differences. The advantage of these new ways to pay are their little (or no) transaction fees and their prepaid nature (can only spend what you have in your account)
A little bit more about each:
As mentioned, PayPal is the grandfather of online payments. It really has a corner on this market. However, I believe others will gain ground because of their high-fee structure. But it still provides a very secure and convenient experience.
A newer start-up out of Iowa, Dwolla only charges .25¢ per transaction. It also offers users the option of exchanging through many of the social networks, including Twitter, Facebook and LinkedIn. “Our transactions are also devoid of the financial information typically compromised in credit card transactions,” said Jordan Lampe, Dwolla’s Director of Communications.
Another newer payment system, Serve is an American Express company that will be providing free transactions til the first of the new year. They have just finished a large marketing effort to get folks signed up by offering each new signee a $10 credit in their account. They also have a plastic card which may be used anywhere American Express is accepted.
Another newbie, Google Wallet hopes to replace your wallet (or purse) by using your mobile device as the credit card. Just swipe your phone at various Citi or MasterCard merchants, and you’re good to go. Wallet is only available via the Nexus S 4G on Sprint (10/11).