Send Money With Gmail

Category: Finance

Google has announced a new feature that will make it possible to send money from using Gmail. If you already know how to send a photo or document in an email attachment, you'll have no problem sending money with Gmail. So how does it work, and how does it compare to similar features offered by Paypal? Read on to learn more...

Google Wallet Takes On Paypal

Google Wallet, the search king’s mobile payment system, announced an exciting new feature at its geekfest, Google I/O, in mid-May. Wallet users will soon be able to send money instantly to friends, family, and any other Wallet users via Gmail.

This is bad news for Paypal, the eBay subsidiary that does exactly the same thing. It may be good news for Paypal users fed up with the company’s fees and increasingly restrictive terms of service. But Google Wallet is not without its shortcomings compared to Paypal. Here's my take on the pros and cons of each.

Google Wallet lets users tap more types of payment instruments than Paypal. In addition to checking accounts, credit cards and debit cards, Wallet users can pay using gift cards, loyalty rewards accounts, and promotional discount codes. Payment instruments can be added to Google Wallet manually by users or automatically by vendors of the payment instruments.

Send Money with Gmail

The Wallet feature in Gmail works much like sending and receiving attachments. To send money, look for the $ icon in your attachment options. Gmail will prompt you for the amount and the funding source, and off it goes. You can even send to recipients who don't have Gmail, but both parties will need a Google Wallet account. The money send/receive feature will be rolled out to Gmail users in the U.S. over the next several months. If you can't wait, find someone who already has the feature and convince them to send you money. You'll get access in order to receive the funds.

What Does it Cost to Send Money?

There is no charge to send money from your Google Wallet balance, or from a bank account linked to your Wallet account. Sending money with your credit or debit card will cost 2.9% per transaction, but receiving money is always free.

Paypal also allows for no-fee money transfers, when using a Paypal balance or linked bank account, but only between "friends and family". Paypal is the final arbiter of who gets to be your friend or family member. If it appears you're sending or receiving payments in a business context, fees will apply. Like Google, Paypal charges 2.9% when you use plastic, but they also impose a 30 cent per-transaction fee. Unique to Paypal is the fact that users can choose whether the sender or receiver pays the 2.9% fee.

Plenty of Competition

On the downside, Google Wallet cannot be used in as many locations and environments as Paypal. Wallet is only available on certain Android smartphones and tablets, and not on any phones sold outside of the U.S. The new Google Mail option will work only on desktop PCs, not mobile devices. Merchants can offer Google Wallet payment only in stores equipped with Mastercard PayPass terminals (about 300,000 locations), or on the mobile versions of their Web stores. Even worse, online shopping with Google Wallet has been blocked by the biggest U.S. mobile carriers.

Only Sprint allows on its network apps that access the Secure Element hardware chip that must be embedded in a phone in order for Google Wallet to work. You can buy phones that include Secure Element from AT&T, Verizon, and T-mobile, but you won’t be able to access Google Wallet through those carriers. The likely explanation for blocking Google Wallet is that these three carriers are working on their own mobile payment system called ISIS, which won’t be rolled out before 2014.

Visa PayWave is another mobile payment platform licensed by Google. It’s similar to Mastercard PayPass’ system of apps and terminals. But PayWave is in limbo for now; Visa, phone makers, and carriers won’t say when it will be implemented.

The Gmail option will make Google Wallet available to more users, increasing its brand awareness. But it’s not intended to be a new market. Perhaps the biggest disappointment is Google’s announcement that there will not be a Google Wallet debit card similar to the Paypal Mastercard. Some people use their Paypal card heavily; it works with PIN or signature (debit or “credit” mode), and pays better rebates on signature purchases than most banks’ cards. Maybe if Google could find a way to display ads on a credit card...

Google Wallet may show up on Web stores using the Gmail option for payments. But unlike Paypal, which heavily supports developers of e-commerce systems, for now, Google seems to be content to let this option remain an informal means of swapping a few dollars with friends and family.

Your thoughts on this topic are welcome. Post your comment or question below...

 
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Most recent comments on "Send Money With Gmail"

Posted by:

Brian Larkin
20 May 2013

You describe what happens at the sender end, but what about the receiver end. Beside having a PC, gmail account and Google wallet, what does the recipient do? Does he or she have to link to a bank account or something, or does he or she get a printable check that can be cashed somewhere, or what?

EDITOR'S NOTE: It works just like Paypal. You can leave the funds in your Paypal account (and spend them at merchants who accept PP payments) or transfer the money to a linked bank account.


Posted by:

Tony B.
20 May 2013

I buy a "Green Dot" Card ($4.95 ea) to load up with cash then have to transfer that to my Paypal acct which then sends the money to my bank acct. A lotta work but that`s how I must add $ to my Ally Bank acct. Would Gmail offer such a service? Thanks Bob for all the wonderful news and info you tirelessly provide. Thanks Man!!


Posted by:

RichF
20 May 2013

I find Chase Bank's Quick Pay far easier to use and less restrictive than most other systems.


Posted by:

Ken
20 May 2013

Yikes!!! Another way to spend your money fast!
It is too easy to push a button and send your money for goods, services, travel, etc. I found it is better on the wallet to have more time to contemplate the purchase.


Posted by:

Marcy
20 May 2013

How do I send money, either with PayPal or Google Wallet, if the recipient does not have a bank account?

EDITOR'S NOTE: You can send the money to the recipient's PP or GW account, and they can spend it at online retailers that accept that form of payment.


Posted by:

don koos
20 May 2013

what a great idea.
d.k.


Posted by:

Dianne
20 May 2013

Why should I trust Google with bank information when they have shown no regard for personal privacy? I don't use Google. Period. When they are the only game in town, it will be a sad day indeed.

EDITOR'S NOTE: How has Google violated personal privacy?


Posted by:

Damodara Surya Rama Prasad Dubey
21 May 2013

A very good feature but this is possible only with android phone. Then how about other mobiles which are not having such system?


Posted by:

Joseph
21 May 2013

Any idea if and when this WALLET will be available in Europe? Malta in particular.


Posted by:

Jon
21 May 2013

Any competition to PayPal will be welcome. Especially when it gets to the UK

Maybe one day our aging banking system will modernize and only be a few decades behind the internet.

Thanks for the info,

Jon


Posted by:

tristram
22 May 2013

eBay allows payments ONLY through PayPal.


Posted by:

Bruce
22 May 2013

For me the major benefit of using PayPal is being able to purchase and print shipping labels for much LESS than at the post office.


Posted by:

Georjina
22 May 2013

One itty, bitty note to this - If you have been using Google Checkout to make online purchases, the program is scheduled to be shut down by Google in November 2013. That means you'll only be able to use Google Wallet, period.

Here's why you may still want to keep your Paypal account - you can get a debit Mastercard to use whether you have a "smart" phone or feet to shop locally. Google's program will only work for online shopping which restricts where you can use it. And if you have to access your bank account anyway, why go through the hassle of adding Google Wallet when your bank issues you a debit card?

It may work for those who must shop online, but for everyone else - give some serious thought to just how many places will have access to your money when the next round of "hacker proof" systems get hit. What guarantees will Google give you when, not if, your account is hijacked and your money is gone?

Final tip - read everything before using any system, that includes Paypal, Google or whatever else comes out the woodwork.


Posted by:

adera
25 Aug 2015

hi , may i ask the sender must open up the receiver's gmail account to send the money is it? because my sender is asking for my password, he said that he needs to log on to transfer the money. Is that how it should be?

EDITOR'S NOTE: Absolutely not! Sounds like a scam.


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