Settle up with your smartphone using these better-than-cash apps

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Smartphones have made it easy to send nearly anything to your friends and acquaintances: messages, pictures, files, even live video of whatever you're looking at. But transferring a little cash to your buddy with your phone? Until recently, that has been a bit of a hassle. Some recent apps have made passing a few bucks person-to-person a little easier.

Mobile-to-mobile payments are already part of everyday life in some developing countries, but they're just coming into their own in the U.S. The latest crop of personal payment apps are pretty impressive, however. You can repay friends and request cash with nothing but your phone, usually with neither person paying any kind of fee. Here are a few apps that are, dare I say it, better than cash.

Square Cash

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Square Cash is nothing if not straighforward.

This is currently the killer app when it comes to paying back friends, buying small favors, or requesting the cash that's owed you. There are no fees (below $250), the app is simple and clean, and you don't even need the app to use it, really. Cash comes from the same Square that made charging credit cards as simple as plugging in a free reader into a headphone jack. It's an interesting "hack" of the debit card system, but all you really need to know is: it works.

You need a debit card, access to email, and enough money in your checking account. Sending or requesting Square Cash is basically sending an email to your friend, with a CC to, and the amount to send as a the subject ("$5.99"). All the app really does is pre-format that email and make sure it went through. If neither of you have used Square Cash before, Square securely snags debit card details from both of you. If either of you have sent Square Cash before, it's near-automatic.

I've used Square Cash to pay friends for parking, cookies, lunch, small purchases, and other items at least two dozen times, and only encountered a strange verification error once. It is as it is labeled: basically cash.



Venmo requires a bit more setup than Square Cash.

One step more buttoned-up than Square Cash is Venmo. The positive difference is that it's a bit easier to find the person to which you're trying to send money. The downside is that it requires a bit more setup on both sides.

Like Square Cash, Venmo takes money from your checking account (directly or via debit card). You can technically set up a credit card, too, but that incurs a 3 percent fee for the sender, so better to keep that as a backup. Unlike Square Cash, you have to do a bit of setup with your bank account before sending and receiving; the service deposits two micro-transactions of into your account, and you must verify the amounts. Once set up, it's relatively simple to pay people in your phone contact list, pay off group restaurant tabs, and cash out payments you've received.

Venmo goes out of its way to assure you of the security of your accounts and transactions. At the same time, it makes it very easy to tweet, share on Facebook, or Venmo-broadcast your activity to friends. Just make sure your settings are in order, and your bank all set up, and it is a rather simple app to use for payments.

PayPal on Android


The best thing about PayPal is that everyone knows it and has an account already.

You, and most of those who have bought anything on eBay or through a small online shop, know the PayPal drill. With its Android app, PayPal tries to make person-to-person payments a tad simpler.

As with PayPal on the web, PayPal allows you to send payments to "Friends or Family" for free, as long as they're coming from a bank account or a stored PayPal balance. If you're paying for "Goods or Services," or with a credit card, there's a fee. If you're paying for a good or service from a friend or family, well, it's up to you to split those hairs. Most anyone with a smartphone probably also has a PayPal account set up, so it's fairly likely you can pull up their contact, send, and get your guilt out of the way. Plus you can quickly pay at small merchants and a few big-box stores (including Home Depot) that offer PayPal Here checkout

If you and your friend are touting phones with NFC, and you both have the PayPal app installed, you can open up PayPal and tap phones together to move the money around. It's a simple enough process, and it has a well-designed flow—one that makes you wonder why they can't get the mobile folks to work on the main PayPal website. On the other side of speed and ease, you can ask PayPal to verify each transaction with you by SMS, passcode lock the app, and more. Given the widespread knowledge of the PayPal name and brand, it is the most familiar way you might pay someone back, even if they don't have the PayPal app installed.

The main drawback to PayPal payments is inherent to PayPal itself: it's probably not your primary bank account, and it can take 3-4 days to get that money from PayPal over to your bank accounts (if you remember to transfer it at all). And there are the occasional, confounding freezes on pay-outs that come with PayPal transations. Thought if PayPal is common and familiar to your financial life, PayPal paybacks could be convenient.

Last-Resort Card Readers: Intuit GoPayment, Square Reader, PayPal Here

Maybe your checking account is looking a little thin, or you're owed a sizable sum from a friend who is also not prepared to make with the instant transfer. Credit cards are your last resort (other than extensive dish-washing and lawn-cutting).

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Intuit's GoPament lets anyone take credit cards, but there's a fee.

Square's reader can take payment from traditional credit cards, even if you're just a regular old person, not a business. And they'll even give you the reader for free. Also free is Intuit's GoPayment reader and service, and PayPal Here. Both do a bit of credit checking on you, and require a two-micro-payment verification of your bank account. After that, you take payments with either a swipe, or manual entering of a card, its CVV, and the billing ZIP code.

None of these are great solutions, though, when the money due is due real soon: at meal's end, on the way to a concert, when the bar tab comes due. They require setting up a merchant-like account and carrying around a physical card reader, which is just one more thing to get lost in your bag. There are fees on the receiver, too: between 2.7 and 3.5 percent, depending on which service you use and how you pay. But sometimes, getting the money now, with a small fee, is worth more than the no-fee payment your roommate swears is coming, just as soon as his band clears up its Tuesday-night fill-in gig.

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