MasterCard is taking on PayPal with a new app for the iPhone and iPad users, called MoneySend. The free app allows anyone to transfer money to another account in the United States.
MoneySend, which is partly powered by Obopay, allows users in the U.S. to send or request money via an iPhone app through banks and credit unions. Senders and receivers can either use an existing MasterCard account or a bank account. Users can also create a virtual prepaid account through Bancorp Bank that is linked to an existing MasterCard credit card or checking account.
The user designates an account for the MoneySend transaction, and then users can manage and trigger the exchanges through the app. Users who transfer money will incur a transaction fee and recipients don’t face any additional fees.
Of course, there are security concerns with storing financial information on a device or app, but MasterCard assures that personal and financial information is never stored on the iPhone or iPad.
This is the second instance of MasterCard encroaching on PayPal’s territory over the past week. Last week, MasterCard announced a definitive plan to open up its credit cards payments platform to developers to build innovative online and mobile apps. This has been the territory that PayPal has basked in, thanks to a much hyped launch of its API, PayPal X. Clearly MasterCard is making a big push to get into the mobile payments space; but PayPal is a tough competitor with massive reach. It should be interesting to see if MasterCard can compete with PayPal.