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Obopay vs. PayPal: Ease-of-use vs. cheap to use
 
Obopay vs. PayPal: Ease-of-use vs. cheap to use
The battle is on for mobile money transfers as eBay's PayPal, the online payment veteran, is taking on the plucky, young up-start, Obopay for domination in the budding space. Just this past week PayPal announced its inclusion in Sprint Nextel's MyMoneyManager suite of mobile financial services. PayPal and partner mFoundry are on deck to provide banking services for Sprint, making the carrier the first major operator in the U.S. to enable mobile money transfers between subscribers. The battle could hinge on ease-of-use vs. price points.
Obopay made the headlines today with a new president for the U.S. business, Gregory Holmes, who has spent 20 years in the payments industry. Yesterday Obopay announced that Indian telecom Essar had bought a strategic stake in it for an undisclosed amount. The news follows a $20 million fourth round of venture capital for Obopay.
Until recently both Obopay and PayPal have had somewhat similar approaches to enabling users to transfer money through their mobile phones: Users needed an account with Obopay or PayPal in order to send money or access the money sent, and to sign up for an account you need a credit card. Users can send the money via SMS, WAP or an application residing on their handsets.
Obopay exacts a 10 cent sending fee per mobile money transfer but those receiving money do not need to pay. Users who fund their accounts from their credit or debit cards have to pay a fee of 2.5 percent.
PayPal's deal with Sprint for its MyMoneyManager suite brings a nearly free mobile money transfer solution to Sprint subscribers but it may not be as easy to use as Obopay. MyMoneyManager requires a data plan. Sprint charges users the standard rate for text messages, but no additional fees apply, according to the carrier.
Earlier this month Obopay started to allow its users to send money to other people directly out of their checking accounts. Recipients no longer need to have Obopay accounts to access the money either. Those who receive money can provide their routing and transit numbers from their mobile phones allowing the money to go directly into their accounts, too.
So, ease-of-use or cheap to use: Who wins the mobile money transfer market? -Brian
Comments (8) | Post a comment
Comments
Posted by Anonymous | April 30, 2008 - 5:09pm
You may want to check to see if Obopay actually works. Rumor has it that they've burned bridges with the carriers because their "real time" transfers took about 3 days.
Posted by Anonymous | April 30, 2008 - 5:10pm
Did you know that Obopay pulled their debit cards from circulation citing "fraud and risk" issues?
Posted by Anonymous | April 30, 2008 - 5:15pm
Hmmmmmm, 150 million customers and world class fraud engine vs. 5,000 customers and a startup bleeding money? I will take PayPal.
Posted by Anonymous | May 1, 2008 - 6:57pm
I have never used Paypal outside of buying a pair of shoes on eBay. I don't think of them as a mobile product for me.
Posted by Anonymous | May 20, 2008 - 12:39pm
Years ago PP was a start up doing things others could not or would not do successfully. They have done well but mobile is not their forte.
Obopay like the PP of years ago is a company concentrating on a product. That focus should help them provide a world class service. I am betting PP a huge battleship that is hard to redirect will stick to their world and obopay will excel with their focus on mobile payments.
Posted by Skip | October 23, 2008 - 5:27am
I can't find those rumors. Perhaps you started them?
Posted by Skip | October 23, 2008 - 5:32am
PP is plagued with problems and complaints. They freeze accounts randomly, won't return money when they are supposed to, return money when they shouldn't, and trying to contact customer service is like trying to contact aliens.
I've been using them since the month of their inception and I'm fed up. I'm looking for an alternative that works. If obopay is it so be it. I know I'm tired of the high fees from PP as well. If you think PP is better, stay there a while. You will eventually regret that decision.
