Q&A: What Are the Best Mobile Banking Apps?
By: Brian O'Connell

Question: I love my new cell phone and am just starting to figure out all the apps I can use. Since I travel a lot, one feature I’d love is to send cash to my family and to my employees via my cell. How can I do that? — V. Gaydos, Baltimore.

Answer: Transferring cash through your cell phone is a technology in its infancy, but 2010 could be the year that it finally puts its “big boy” pants on — especially here in the U.S.

Up to now, the mobile banking technology has been more prevalent overseas, especially for cell phone users along the Pacific Rim (South Korea has long had cell phone “cash pay” technology.)

But U.S. banks are catching up. In 2009, Bank of America (Stock Quote: BAC) came out with a mobile banking service that enables customers to transfer cash between accounts and pay bills via cell phone. The bank released a Google (Stock Quote: GOOG) Android phone application last October, and has rolled out a Blackberry version in January. An iPhone app is available, as well.

Credit card companies are getting into the act, too. Both American Express (Stock Quote: AXP) and Discover (Stock Quote: DFS) offer mobile payment services, but sending $50 to your Aunt Emmy isn’t one of them.

Perhaps your best mobile payment option is through PayPal. The online payment giant’s PayPal Mobile has been around since 2006 and each version gets better and better. The technology has essentially morphed into a mobile banking unit that enables banks affiliated with PayPal to create cell phone cash payment delivery systems for their customers. Nokia’s Obopay, Amazon’s (Stock Quote: AMZN)  TextPayMe and CashEdge’s POPmoney offer similar cash payment cell phone options.

The common denominator among all four mobile banking services is ease of use. All you have to do is tap in the recipient’s e-mail address or phone number to zap cash into his or her bank account, or straight onto a debit-like payment card. If you opt for PayPal, the recipient will need to set a PayPal account.

Using PayPal as an example, here’s how to set things up:

  1. Sign up for PayPal, which will automatically ask you for a payment account, like a credit card or checking account, to store money.
  2. Tap in a text message to 729725, type in the cash amount you wish to send and type in the recipient’s e-mail address. Hit "send."
  3. PayPal will confirm the transaction using a text message or e-mail to your cell phone.

According to the PayPal Web site, the company “does not charge you to send or receive money on your mobile when the payment is funded by PayPal balance or bank account.” That said, currency conversion fees may apply.

Expect more features as more banks and online payment companies hone their mobile banking services. 2010 definitely looks like the year of the mobile bank app, and cash transfer technology is front and center.

—For more ways to save, spend, invest and borrow, visit MainStreet.com.

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