Oh, the joy of moving money electronically. Banks wire funds but charge 20-plus dollars for the privilege. Credit card companies can move money virtually--but they take a healthy percentage of every dime they touch. Web-based tools like PayPal let you deposit and withdraw money--but there can be a three-day wait for the funds to clear.
But a new day in e-funding is upon us. Automated Clearing House, aka the ACH Network--the basic fabric that all banks, credit card firms and even the Federal Reserve use to move money--has started to attract progressive startups and services that could knock some of the pain out of moving money around.
"Whoever solves the ACH Network problem first is going to create a very disruptive day in the payments world," says Ben Milne, CEO of Dwolla, a cash-based payment network in Des Moines, Iowa.
Here's the inside scoop on five firms that could change the way you pay.
Seattle-based doxo (Jeff Bezos is an investor) is an online payments service disguised as a file-storage firm: Store all your bills, banking info and vendor information and poof, doxo can pay 'em, with nary a check in sight. CEO Steve Shivers would not disclose specific fees for the service, other than to say it runs about one-third of the cost of electronic funds transfers.
This socially oriented funds-transfer tool requires users to preregister, identify and confirm a transfer before funds move. Yes, it's a hassle. But the payoff (or, rather, low payout) makes it worth your while: Dwolla moves funds electronically for as little as a quarter. No, not a quarter of the payment--just 25 cents.
You can print your concert or movie tickets at home, so why not cash? Mountain View, Calif.-based PayNearMe lets you do just that, sort of. The shop has a deal with 6,300 7-Eleven stores that makes it possible for users to swap a home-printed funds-transfer receipt for greenbacks. Rates vary, but the company says they are in line with current banking exchange costs. This won't be the cheapest way to get your dough, but it's the most flexible.
PaymentNetwork is the e-money giant's attempt to stay relevant in the low-cost funds-transfer game. And Intuit is not messing around. Not only is the company moving money for 50 cents per transfer, but funds under $5,000 can clear in one business day.
New York-based Popmoney would be just another mobile funds-transfer firm--the tool moves cash to any e-mail address or mobile phone--save for one thing: It has deals with Citibank, PNC and many other first-line banks. Which means you can test the fast-funds-transfer waters from the security of a traditional bank account.