Is Square Cash the TKO Winner of the P2P Fight?

NEW YORK (MainStreet) — When comedian Dan Nainan found himself out of cash to tip the coat check person at Nobu 57 in midtown Manhattan, he had a epiphany. "What's your email address?" he asked her.

When he had it, he made a few clicks on his phone and just about that fast $1 rocketed off to her.

"It was that easy," said Nainan, who explained that the tool that powered that exchange is Square Cash.

Up in San Francisco, marketer Joel Goyette said he has used Square Cash to pay lots of bills, from settling up with Craigslist vendors to reimbursing friends for his share of weekend trip expenses. Did he encounter friction when he paid with an email?

"The reaction has been mostly positive, since I'll often just send the money without much explanation," he said. "When there's $375 waiting in your inbox, most people don't protest."

Getting the idea it's time to take a look at Square Cash?

From the Wall Street Journal to the New York Times, numerous outlets have rushed to declare Square Cash, a comparatively new offering from the company that invented a way for just about anybody to accept credit cards, the new winner in the person-to-person payment wars.

That's important because, frankly, maybe until right now, more words have been written about p2p - short for person to person payments - than there have been dollars exchanged.

That's not been for lack of cool competitors, from Google Wallet (which transforms Gmail into a money transfer tool) through PayPal and the startup favorite Dwolla.

But nobody much used any of them and loud as the buzz has been around p2p, the consumer indifference has been louder.

Until Square Cash, which has unlocked the secret of making it so easy to execute p2p, anybody with an email address and a United States issued debit card can send a payment to anybody else with a similar card.

It works like this. Call up an email form. In the TO field, insert the recipient. In the CC field insert "Cash@Square.com" In the subject line, enter the amount. Leave the message field blank, or add a note to the recipient explaining the why of the money.

If this is your first transfer using Square Cash, you will get an email inviting you to a website where you enter your debit card info. The recipient gets a similar email, asking for his debit card. A business day or two later, the money shows up in the recipient's account.

It can't be that easy? You're right, it's not if you send more than $250 in a week. Then Square also wants the last four digits of your Social Security Number and friend level access to your Facebook page.

Alternatively, you can provide your full name, date of birth and those same last four digits of the SSN.

Take either route, and you are authorized to send up to $2,500 in a week.

Still don't believe it can be that easy? Go to Square.com/cash - enter your email address and Square will email you $1. To collect, you enter a Mastercard or Visa enabled debit card, your zip code and the card security code. Done.

What fee does Squre Cash impose? Zero. Nada. Zilch. Zip.

At least for now. When Square first began talking about Square Cash, a per transaction fee of 50 cents was mentioned. That compares to 25 cents from the recipient at Dwolla for transactions above $10 and either free at PayPal for friends and family transfers or fees that climb to 2.9% plus 30 cents for payments to businesses, payable by the recipient. Gmail money transfers - available to at least some Gmail users and also to anyone who downloads the Google Wallet app -- are free if the money is drawn from a linked bank account. If the funds source is a credit or debit card, Google charges 2.9% per transaction.

Square Cash booster Eric Daimler, incidentally, said that what hooked him from the get-go with Square Cash is its simplicity. As for the competitors, this Ph.D. holder said, "I had a friend once try to send me money with Dwolla and it took, quite literally, 90 days between the confusing emails and bank verifications. And this is between two people with graduate degrees!"

He added: "I have completely given up trying to understand the full list of credits and debits inside of my full PayPal statement. It is a mess on the order of a publicly regulated utility."

What's the Square Cash downside? Experts agree the issue is that both users have to trust the company with important personal data and, in an era of rampant data breaches, that's always an issue. But Square, with its credit card processing business, already handles millions of pieces of financial data and so far, so good.

Knock on wood because, just maybe, this is the innovation that finally will break our habit of writing checks for bills that really want to be settled digitally.

--Written by Robert McGarvey for MainStreet

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