The technological innovator, Ribbon that launched the in-stream payments option and invited merchants to sell products on Facebook, Twitter, YouTube and their own websites has another great service to offer to American residents. It is the peer-to-peer money transfer service, compared to PayPal and Stripe.
They intend to simplify the complex world of payments. For merchants, they have the platform to sell on social networks and on their own websites, but for everyone else, they have a way to send and receive money online, on any device.
It works really amazingly and the users get a unique link to their profiles that can be shared for senders to send money to them. For example, if my username is waseem, my profile is at ribbon.co/waseem. Senders can pay using their Ribbon account balance, a debit card or a credit card. Another great feature is that if the sender appends the URL with the amount, the amount is pre-filled when the profile loads. For example, ribbon.co/waseem/5.50 pre-fills $5.50.
Ribbon users can send money to anyone with an email address or to the recipient’s Ribbon account. If they have a Ribbon account, recipients receive the money in their account. Otherwise, they can follow the instructions in the email to claim the money using a bank account or a credit card. Limits apply for unverified users to cash-out money from their Ribbon balance, which is $500 a month. Verified users can cash-out as much as $10000. They can cash-out to any US bank account and most major credit cards.
No fee is applicable for using a debit card with a Ribbon account, but a 3% fee is applicable per transaction for credit cards. The service is not available on demand, if users have not yet signed up. They would have to request for an invite by entering their email in the ‘Reserve your Username’ field here.
The service is really great as it does not require both the sender and the recipient to have a Ribbon account to send or receive money; only one of them needs to have an account with Ribbon. The fact that registrations are delayed hints that there is a huge demand for the service. Currently, the service is available in the US only, but maybe expanded with time.
We know that PayPal has many products and solutions but did we know that third parties use their platform to offer their own solutions? Send Moola does exactly that; they present another way to send money and get paid on any Android device. The payments are done on PayPal’s platform, but the application is their own and the solution is offered by them.
Anyone can send money using their PayPal balance or a payment card, just like they do with PayPal. Money can be sent to anyone with a PayPal email address or to anyone as an attachment with e-greeting cards. Anything from paying the Pizza man, paying for flowers and paying businesses is possible with Send Moola through their widgets dedicated for each such service.
Sending money is a 5 step process, which is also true for receiving money and for business services. The first step is to choose an image based on the occasion or upload a custom image; the second step involves selection of the service; available services are sending, receiving and accepting cash (for businesses). We are concerned with sending and raising money, so we first choose “Send Money”.
The third step is the creation of a custom widget for sending payment, entering the amount which cannot exceed $1000 per transfer and entering the sender’s and receiver’s PayPal email addresses. The next step is confirming the e-card and the amount, after which a license has to be purchased, which costs 1% plus PayPal fees for 1 year or 2% plus PayPal fees for 6 months (10 widgets/uses allowed) and 3% plus PayPal fee for only 1 widget.
For raising money, similar steps are to be followed, except that the amount need not be entered. The fee for this is $5 for 6 months (only 1 widget) and $7 for 1 year. About accepting payments, I will write elsewhere. The service is good and brings families together but it is quite expensive as it adds PayPal fees along with its own; otherwise, the service is quite interesting.
You can send money online through your computer, or, more often nowadays, through your cell phone. When you compare the money transfer process for computers and cell phones, you find certain common risks and benefits.
However, there are also unique aspects of handling finances using a cell phone, which is why it is so important to learn about necessary precautionary measures. Although people have been using mobile devices to transfer money for years, there are still questions and concerns raised.
The first thing we wanted to address is the benefits of money transfers whether using a computer or cell phone. Sending and receiving money has also been an option for years although initially, it was businesses that took advantage of this service.
However, there are now just as many individuals completing money transfers as there are businesses thanks to the increase of eCommerce websites, as well as auction sites such as eBay, but also high-tech mobile devices.
Before the potential risks associated with mobile money transfers can be fully understood or appreciated, we felt it important to provide a few of the key benefits that a service such as this provides.
Ease of Use – While some systems can be a little challenging to navigate, most are extremely easy. In fact, sending and/or receiving money can usually be done in about five or six simple steps, whether using a computer or phone. o Fast – Most people are surprised at how fast most transfer services are, especially compared to similar services provided by a more conventional financial institution. While it could take slightly longer for an international transaction to complete over one on a national level, the process overall is quick and seamless.
Exchange Rates – Another benefit of using mobile money transfers or those with a computer for international business is that exchange rates are quoted in real time.
Low Fees – It is common for fees to be charged with any money transfer. For example, companies have a standard processing fee for services rendered but in addition, any intermediary or foreign bank involved in the transaction could also impose a fee. However, even with fees being charged, money transfers are cost-efficient compared to other means of sending and receiving money.
Safe – Typically, companies that offer money transfer services have the latest and greatest security measures in place. After all, if customers begin to experience loss, the company would fail so everything possible would be done to protect a person’s information and ensure every transaction completes as scheduled.
Two of the greatest benefits specific to mobile money transfers only are privacy and mobility. By using a cell phone, money transfers and other financial tasks can be performed at home in privacy and comfort. Because so many people work hard to protect personal and financial information but also due to an increased risk for identity theft, having the ability to complete financial business at home is appealing.
The second benefit of flexibility is something that people also appreciates. With this, a financial transaction could be completed while in public without anyone knowing. As an example, using a mobile device, an individual could send or receive money while at dinner, in a business meeting, or sitting in a movie theater, among other things and again, with on one nearby being the wiser.
Along with all the benefits that go hand-in-hand with mobile money transfers are some risks that need to be considered. The following risks are just a few of the things that could go wrong with mobile money transfers.
Handset Incompatibility – To complete financial transactions via mobile device, the handset must be compatible with the service. Today, virtually every telecommunication company sells one or more phones capable of handling money transfers but an individual should check requirements for any company being considered for a service such as this prior to a transaction being started. o Network Coverage – The mobile network would need to be capable of handling a significant amount of traffic but also provide high speed service. Although not an issue in North America, there could be challenges when trying to send or receive money in developing countries.
Hackers – Even with state-of-the-art security measures in place, there are still professional hackers that tap into cell phones to capture all types of information to include both personal and financial.
Fraud – Scam artists recognize the increase of mobile money transfers and as such, have devised new schemes to con people out of money. Unfortunately, people still get caught up in fraudulent acts every day even with all the education provided to the public.
Lost Device – The bottom line is that it is much easier to lose a cell phone than it is a computer. Mobile device owners are always reminded to use or install the most current software to block access to financial websites but also keep personal information locked or hidden. Even taking all the precautionary measures possible, a lost device could end up in the hands of the wrong person.
In parts 1 and 2 I reviewed some of the major money-transfer services. I’m specifically looking at the ability to send money using a credit card. Now I’ll continue with some of the lesser-known services.
Recommendation: worth looking into. Possibly a good alternative to Paypal for those needing to pay by credit card; however, there are a lot of fees.
MoneyBookers, founded in 2002 and based in London, is a specifically internet-based payments and money-sending service. They also perform payment processing for websites, online auction sites, and other corporate users. So it’s a lot like Paypal. Over 100,000 merchants are registered with MoneyBookers.
As of 2012, MoneyBookers is in the process of changing their name to Skrill. Why, I don’t know. “MoneyBookers” sounds vaguely shady, but “Skrill” sounds like some kind of tiny sea-creature. MoneyBookers’ PR machine says, “Skrill is going to better represent what we are and what we will become, as well as differentiate ourselves in a crowded marketplace. Skrill was an informal term for money. But we – and you – are going to make it more than that. In the same way you ‘google’ something or ‘skype’ your friends, people will soon ‘Skrill’ money.”
Okay… grandiose wishes aside, the company’s payment systems have not changed. You can send money to over 200 countries. I have not used the service, but what I understand from the MoneyBookers website is that it works a lot like Paypal. You sign up for a MoneyBookers account, and you can send money to anyone who also has an account. The sender pays a transaction fee of 1%, and the receiver pays no fee. However, when the receiver wants to withdraw the funds from his MoneyBookers account he will pay a small withdrawal fee. The amount depends on the country, and the method of withdrawal. To withdraw by bank transfer may be free, but to withdraw by check could cost between $1.80 and $3.50.
There’s also this caveat at the bottom of MoneyBookers’ rates page:
“For transactions involving currency conversion Skrill (Moneybookers) adds 1.99% to our wholesale exchange rates for foreign currency. This charge serves as a protection against the volatility and risk associated with FX markets. The Skrill (Moneybookers) exchange rates are updated on a regular basis throughout the day.”
You CAN upload funds to your MoneyBookers account by credit card. All major credit cards are accepted: AMEX, Visa, MasterCard, JCB, and Diners Club. So that’s a big advantage over most other money-sending services. However there is a 1.90% charge to upload money by credit card.
This means there could be as many as four separate fees: one to upload money with your credit card, another to send money, a currency exchange fee if your recipient is in a foreign country, then your recipient will have to pay a withdrawal fees.
That’s a lot of fees, man. Still, MoneyBookers may present an alternative to Paypal for those needing to fund a money trnasfer with their credit card.
If any readers have experience with MoneyBookers, please chime in and let us know how it went. Was it easy to transfer money? Were the fees reasonable?
7. Amazon Payments
Recommendation: recommended. Easy to use. Works just like Paypal.
Amazon payments lets you use the payment information saved in your Amazon.com account to send money to friends and family. You can send money to their email address or to to their U.S. mobile number. You can do this from your computer or your mobile phone.
Here’s how it works:
1. You go to the Amazon payments home page and sign in using your Amazon.com email and password (If you don’t have an Amazon.com account, you can create one).
2. The next page will ask you to confirm your contact info, and to enter your mobile number. You’ll also have to verify your identity using the last 4 digits of your Social Security Number or the month and date of your birthday. Then you set a security question, and continue.
3. Amazon Payments will send a confirmation code to your phone. It will be some weird phrase like “starry water”. Enter that code on the next page.
4. You’ll be asked to choose a 4-digit pin to authorize your mobile transactions. Pick something you’ll remember, or write it down somewhere.
5. At this point you’ll be asked to activate your account by either sending money online, or using your mobile. If you choose online for example, you will have to verify your email address and add a credit card if you have not done so already. Verifying your email just means that Amazon Payments sends you a confirmation link by email, and you click on it).
6. This will bring you to your account page which shows your balance, and you can add a bank account if you wish, view your past transactions, or add or withdraw funds.
7. If you click on the Send Money tab at the top, you have the option of adding money to your account to send money, or using your credit card. I tested out the credit card option so I could review it here. I chose a friend with an Amazon account, and sent $1. I had no money in my Amazon account, so I was prompted to select or add a credit card, which I did.
By the way, you are offered the option of sending the money either as payment for goods and services, or as a cash advance. There’s a warning for the cash advance option that says,
“Select this option if you are not sending money for the purchase of goods or services. You may be charged a cash advance or other fees by your credit or debit card issuer. Amazon Payments is not responsible for these fees. Contact your issuer for more information.”
8. I made my payment and was given a transaction ID and reference ID. The whole process was quite simple and painless, and mirrored my experience with Paypal almost exactly.
I subsequently logged into my online bank account and I learned that aside from the $1 I sent, Amazon Payments charged me a $1 processing fee. So that’s not bad at all. When I sent the money I selected the “goods and services” option and my bank does not appear to have charged anything at all. I don’t know if the fees go up with the amount of the payment. Perhaps I’ll test further in the future.
Based in San Francisco, Xoom.com does not have their own dedicated stores, rather they partner with various financial institutions who act as their agents (this is common of course; Western Union and MoneyGram do it too). For example in Panama, Xoom partners with Citi and the Super99 grocery store chain, among others. They have 42 pickup locations in Panama, which is pretty good.
Xoom seems to specialize in money transfers to Latin America and Europe, though they do have a scattering of agents in Asia and other places. As of this writing they have agents in 30 countries. That may be a far cry from Western Union’s 200+ countries, but Xoom still provides a good service.
The fees are reasonable and you can pay with a U.S.- based credit card or debit card, or with a U.S. bank account. To take the example I used previously of sending $500 to Panama, if you paid by U.S. bank account the fee would be $7.99. If you paid with a credit card or debit card it would be $19.99. They accept Visa, MasterCard or Discover.
I have used Xoom‘s services in the past and found them to be reliable.
If you haven’t read Part 1, here’s my standard warning about funding a money transfer with your credit card:
Be aware that in addition to the normal fees that the money transfer company charges, your credit card company may impose an extra fee. They might see a money transfer transaction as a cash advance, and charge you the cash advance APR (interest rate), which can be considerably higher than your card’s default APR. It’s best to check with your bank first and find out if there are any extra charges for funding a money transfer with your credit card.
5. iKobo.com by Credit Card
I used to use iKobo.com all the time to send money to a web development contractor overseas. Their fee to send $500 to Panama is $21.25 (I use Panama as my example because I used to live there); if you fund the transaction from your bank account you can send up to $1,000 anywhere for only $8, which is a great deal.
However, when I visited the website just now I saw the following notice on their home page:
Important Notice: iKobo money transfer is temporarily suspended while we update our services. Money transfer services will soon be restored.
If you want to use a credit card to send money online from the convenience of your home, there are several options:
1. Western Union by Credit Card
Western Union is one of the world’s leading money transfer companies, with almost 400,000 agents in over 200 countries around the world. If you walk into a Western Union office to send money you must pay in cash, or use a debit card. However, if you do it by phone or through their WesternUnion.com website, you can use a credit card. It must be a Visa or MasterCard, issued by a U.S. bank.
It’s safe to say that Western Union has long been the leading company offering this service of sending money online by credit card.
The money you send will be available to the receiver literally in minutes. You can also transfer the funds directly to the receiver’s bank account. Alternatively, you can have the funds delivered to the receiver’s home or workplace by FedEx the next day.
The sender must pay a fee to send money by Western Union. The fee will vary depending on the amount, and the countries that you send money from and to.
Be aware that in addition to the normal fees that Western Union charges, your credit card company may impose an extra fee. They might see a Western Union transaction as a cash advance, and charge you the cash advance APR (interest rate), which can be considerably higher than your card’s default APR. It’s best to check with your bank first and find out if there are any extra charges for funding a Western Union transfer or other online money transfer.
2. MoneyGram by Credit Card
MoneyGram also allows you to send money online with a credit card. Go to their website at MoneyGram.com, and right on the home page you can choose the country you want to send money to, choose the receive option (for most countries there’s only one option – pick up at agent, local currency payout), enter the amount, and click “Get Started”.
At this point the window will change to show you a cost estimate. For example to send $500 to Panama, the fee is $31 for same-day service, in which the money will be available to the receiver in 10 minutes, or $15 for economy service, where the money will be available in 3 business days. For some reason economy service can only be funded from your bank account, but same-day service can be paid for by credit card.
The window will also give you a link to their MoneyGram location finder, which allows you to search and find a list of MoneyGram agents in any country and city. I found it rather annoying that when I clicked this link, instead of showing me the info in a pop-up page the website took me to a new page, and did not save any of the info I had just entered. So I navigated back to the home page and started over, re-entering the country and amount. Anyway, once you input the info and click “Get Started”, you’ll be asked to register and confirm your email address, then you’ll be able to send money online with your credit card, using the same-day service option.
The same warning applies that I mentioned above. Your credit card company might view this transaction as a cash advance, and charge you a higher APR. Make sure you check with your bank first and find out if there are any extra charges for funding an online money transfer with your credit card.
3. Paypal by Credit Card
Paypal is another very popular service that allows you to send money to anyone who also has a Paypal account. However, Paypal no longer seems to allow the option to add funds to your account by credit card – at least my account does not. Instead, I see only two options: add funds from a U.S. bank account, or add funds from a Green Dot MoneyPak. The MoneyPak is essentially a prepaid card that you can buy at Walmart or many other locations. There’s a service fee to load money onto the card, and you can then use it to pay for various transactions.
So theoretically you could use your credit card to buy a MoneyPak, then use the MoneyPak to fund your Paypal account, then send money by Paypal. However, you’d be paying two and possible three separate service charges, so I do not recommend this option
There are other, smaller services that may allow you to send money online with your credit card. I will look into them in the coming weeks. However, the major ones are Western Union and MoneyGram. These companies are international, well-established and trustworthy. So I would stick with them.