Remember checks? Some of us still use them on occasion. They are those paper things we have to fill out by hand and use to pay for stuff, mostly rent and maybe a birthday gift for the nephew. Just like the U.S. Postal Service is rapidly being replaced by e-mail, checks (and, in some cases, cash) are being replaced with electronic transactions. Virtually every bank has some form of online banking that includes everything from transfers to bill pay -- in most instances, the bank will actually send a check for you. Progress.
For years, the only reliable form of online electronic payment if you didn't have a merchant account -- and only businesses really have those -- was PayPal. It provided a secure way to send money to someone and became the first payment method of choice for eBay customers. But while merchant services for business expanded rapidly -- today, anyone can use an iPhone or iPad with Square or Intuit to accept credit card payments anywhere there is a connection to the Internet -- the consumer market saw services expand slowly until this week.
Google Wallet is a relatively little known service that allowed businesses and individuals to set up merchant accounts similar to PayPal and accept credit card and bank transactions online. Initially, the service imagined people walking through a store and simply waving a phone past a machine, and their card being charged for whatever merchandise they wanted. Some stores embraced the idea -- Apple has an app for its stores that allows you to scan merchandise and walk out without asking for assistance -- but most remained married to traditional merchant services.
So Google changed its approach and has announced the send money via e-mail function. It allows any user to send money to any other user -- yes, even people who don't use Gmail -- via an e-mail. It's remarkably simple and seems like a fairly logical extension of the service. There is no charge if you have put money into your Google Wallet account via a bank transfer. There is also no charge for transfers directly from your bank. If you use a credit card, the rate is a competitive 2.9 percent per transaction.
By opening up this option to users, Google is taking aim directly at PayPal, a service so many have used. But what PayPal has generally lacked over the years is a user-friendly interface. The process is complicated, particularly if you aren't registered with PayPal, and the charges can be high. No one would accuse Google of having a perfect interface, but integrating Wallet with Gmail gives them an instant advantage over any other Internet financial transaction service.
We'll see if it grows into something more significant, but it's an intriguing move by the search engine and e-mail giant.