Ally Offers Popmoney

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A lot of people seem to hate Bank of America, if the comments on my post covering the Bank of America Overdraft Fee Settlement is any indication, but I really like being able to transfer money to my friends when I owe them (they need an account too). I’d use Paypal except Paypal will charge fees, which is too much considering I can write a check (for free) or pay in cash the next time I see them (also for free).

So when I saw that Ally was participating in Popmoney, I took a closer look. I wanted to know how much it would cost me to send money and I was surprised to learn it was free. While it’s basically the next step in Billpay (instead of sending a paper check, it sends electronic funds), it’s still pretty cool that it’s available and free.

How Does It Work?

You log into your bank account, one that supports Popmoney, and simply “send” money to an email address, mobile number, or you can enter direct bank account information. They can an email or text, with which they can use to direct where to put the funds.

If you’re going to use Ally, go to Transfer Funds and then click the “between your Ally accounts and other people” button. This sends you to the Popmoney section. The first step in setting up your account is verifying your mobile number, which takes about two seconds. From there, you can immediately send someone money (including sending a recurring payment).

When you send payment, you can send it to an email or phone, or enter direct deposit information. I didn’t go through with the process to find out what happens after you send money but I imagine it’s pretty straightforward.

How is this free?

I don’t know for sure but I imagine banks pay Popmoney, and its parent company CashEdge, for this service. Eventually, I see this as something of a Paypal killer for people who use Paypal to send money to their friends. While it doesn’t offer any merchant features, thus protecting that piece of Paypal’s business, it is a nice convenient feature banks can show off to their users.

What about Security?

Free is fantastic but is it secure? It’s not a bank, so there’s no FDIC insurance or anything else involved, but the website and its services are 128-bit SSL encrypted. That’s about as secure as you can get.

I’m probably making a lot more out of this than it truly warrants but anytime I can move more money out of checking and into online savings, I’m happy. With this new service and the capability to send money to friends from an online savings account, I can shift more of my checking funds into savings.

{ 13 comments, please add your thoughts now! }

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13 Responses to “Ally Offers Popmoney”

  1. tg says:

    FYI… it is free to send money with Paypal if you fund the transfer with your checking account. fees only apply if you use a credit card.

  2. Matt says:

    Paypal is free for person-to-person payments when using a bank account or Paypal balance. I often use it to send money to people.

  3. Jim, you can send money to friends via PayPal without fees if you use an instant transfer from a linked bank account and make sure you choose the right option (Personal -> Gift, I think) under send money.

    • govenar says:

      Is that free for the person receiving the money, if they’ve used their paypal account to accept credit card payments in the past? (I think paypal used to charge fees then, but I haven’t kept up with their fee changes lately.)

      • Yes, it’s free both ways as long as it’s not sent with a credit card. If it is with a credit card, you can choose who pays the fee. If the sender pays, the fee gets added on to the total sent. If the receiver pays, the fee gets deducted from the total sent. But again, you can avoid it all by using an instant transfer from your bank account.

  4. Jim says:

    Paul – I just discovered that the other day… that still requires the other person to have a paypal account but certainly better than paying a fee!

  5. Popmoney says:

    Thanks for the great write-up of Popmoney. Please let us know if you need more information.

  6. Matt K says:

    use a credit card to send money to friends with no cost.

  7. Brian says:

    Isn’t this essentially the same thing as ING Direct’s person-to-person payment that is a two-day transfer of funds between bank accounts for free?

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