Facebook Friends Get a New Benefit: Now You Can Send Each Other Money The most precious of holiday cards -- the one shaped like a $20 bill, with a peekaboo cutout for the president's face -- may be a thing of the past. Now you can just post a virtual $20 bill on a friend's Facebook wall to say Happy Holidays this year. Or send money to your kids in college -- instantly.

In a joint effort with PayPal, the social media giant launched a new app this week called Send Money that could remake the money-transfer business. While a number of so-called peer-to-peer payment systems already exist, the new app offers a seamless money transfer system between Facebook friends -- and captures Facebook's more than 800 million users.

I took the new app for a test drive. On Thursday, I sent my sister $5 to say "Thanks for being a great sibling!" While I have a PayPal login, I don't keep actual funds in a PayPal account, so I used PayPal to make a payment via my credit card.

That's when I saw a little catch to Facebook's new app: My $5 gift had turned into $5.45 expenditure. PayPal charges a premium of 2.9% of the transfer amount, plus 30 cents, which is the same fee that PayPal also charges on its website. But for $5 gift sent from New York to Philadelphia, it's only a penny more than sending a fiver through the mail in a stamped envelope. And a whole lot cheaper than Fedexing a check or using Western Union, where an instant money transfer of $5 comes with a $5 fee -- and higher sums as the amount being sent rises.

But if you fund the transfer directly from your bank account, or with money that is kept in a PayPal account it can be sent for free. And PayPal cash can be used for currencies in 65 countries.

The turnaround time beat snail mail by a long shot: After I made the payment, my sister reported getting a link for the gift in less than two minutes. She logged into PayPal, where the prompts directed her to withdraw the money from PayPal and transfer it to her bank account. Recipients can also request a paper check.

One disconcerting part of the payment transfer: The email receipt for my payment showed $5, not the actual $5.45 that was debited from my credit card.

Catherine New can be reached at catherine.new@huffingtonpost.com.

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Angelico Evangelista

I feel uncomfortable in doing money transaction using anything related to Facebook or directly using Facebook for that matter. It exposes a lot of information that could possibly lead to your bank or credit card information. Leave money transactions on services providers that specializes in this trade for high levels of security measures are always part of the deal. Even the CIA use Facebook to gather information. If you are worried about cost of service fee, then try using www.qwartapadala.com. For a service fee of less than $5 regardless of the amount that you send, you have a better alternative in sending money online to the Philippines.

September 24 2013 at 11:17 AM Report abuse rate up rate down Reply
peterduckie

This appears to be a good feature for FB users. However, users will be risking their personal information with FB knowing that hackers can access anybody’s account in there. If anybody’s intention is simply to avail of a cheaper money transfer service, why not try www.qwartapadala.com? It offers a fixed service fee of P200 pesos only, which is equivalent to $4.71 in dollars, regardless of the amount of money you send. It also uses a 128-bit data security encryption to ensure that all information between you and Qwarta Padala is safe and secure.

June 04 2013 at 12:00 PM Report abuse +1 rate up rate down Reply
You Lucky Dog!

I found this article via AOL's News Page - They mislead the public by calling this a "FREE Money Transfer App" - it is not free, it's just Paypal. Doesn't anybody fact check anymore?

November 22 2011 at 2:30 AM Report abuse +1 rate up rate down Reply
sergioborroni

I had to remove my account from many web dating sites due to so many people into scams.......do not think that they could have the same malicious aims in the most popular social network in the world ? I am totally against this possible new FB feature.

November 21 2011 at 12:01 PM Report abuse +2 rate up rate down Reply
pogmothoin

Only an idiot would participate in this SCAM. They've closed accounts so we are now protected from every pervert on FB NOW THEY WANT PEOPLE TO SEND MONEY? Yes. Brilliant. Whoever thought of this needs to join OWS

November 21 2011 at 10:45 AM Report abuse +2 rate up rate down Reply
2 replies to pogmothoin's comment
maggieL56

At the moment FB has 4 virus'....why would anyone want to sent money thru them

November 21 2011 at 1:53 PM Report abuse +1 rate up rate down Reply
phhardi8

Oh yea, Trust these people with money.

November 22 2011 at 10:34 AM Report abuse +1 rate up rate down Reply
phhardi8

Their next fiasko will be some one hacked into the system and stole bank account information. I can already hear it.

November 20 2011 at 8:35 PM Report abuse +2 rate up rate down Reply
smiethe1

FB can't keep hackers out of their Network - you think I am going to trust sending money through it???

November 20 2011 at 8:26 PM Report abuse +5 rate up rate down Reply
1 reply to smiethe1's comment
phhardi8

Like I would EVER trust these people with my money.

November 20 2011 at 8:32 PM Report abuse +3 rate up rate down Reply
B

I can't imagine why anyone would have any of their acct numbers on any social network...not me for sure!

November 20 2011 at 6:58 PM Report abuse +1 rate up rate down Reply
dsherline

With facebook's record concerning privacy doesn't a facebook money transfer app sound like a terriffic idea?

November 20 2011 at 6:29 PM Report abuse +3 rate up rate down Reply
imachikadee

Sounds like an accident waiting to happen.....are you serious???

November 20 2011 at 12:40 PM Report abuse +3 rate up rate down Reply