The good news is that they are really cheap, often free, but the bad news is that they don’t offer the buyer protection that credit cards and PayPal do. They warn you to pay only people you know, so in practice this isn’t a problem if you use them that way.
To use any of them, you first set up an account, which they usually call a wallet, and link it to some combination of bank accounts, debit cards, or credit cards. Then you can send money to other people, or ask them to send you money. When you send money, it comes out of your wallet, or if there isn’t enough, out of a linked bank account or card. When you receive money, it goes into your wallet where you can pay other people, or move it to a linked bank account.
All of these systems have websites, which are the easiest places to set up an account. Apple has its own system called Apple Wallet. They also all have apps for mobile devices, which is the easiest way to use them. If you’re out with friends, and someone else has just paid for the pizza, you can use the app right there to pay for your share, or they can send you a payment request.These apps provide a wide range of ways to identify your payees, including email address, mobile phone number, and often Facebook or Twitter account names.
These three systems are more similar than different, so the one to use is the one your friends use. They’re all free to sign up, so if your friends use different ones, you can join them all.
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Dwolla: Accounts can link only to bank accounts, not cards. Payments under $10 are free, above cost 25¢. Payments only to other Dwolla members. Can also be used for some business payments.
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Venmo: Accounts can link to bank accounts, credit and debit cards. Payments from your wallet or bank account are free, while credit cards may be free or may cost about 3 percent. Can pay anyone; nonmembers get email encouraging them to join and collect their payment, which is returned if they don’t do so.
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Google Wallet: Google’s wallet is a peer payment system as well as being the way to pay for downloads on Android devices and a payment system that competes with PayPal. You need a Google account to use Google Wallet. Anyone with an Android device has a Google wallet as part of their Google account, although they often don’t realize it can be used for more than downloads.
Gmail users already have Google accounts, too. Accounts can link to bank accounts, credit, or debit cards. Peer payments are free unless the money comes from a credit card.
