Money transfer via PayPal coming to Skype

Stephen Withers
Wednesday, 21 March 2007 03:51

Your IT - Home IT

A forthcoming version of Skype will allow users to transfer money from their PayPal account to that of another Skype user, founder Niklas Zennstrom has told a conference in San Jose.

People with family and friends overseas are significant users of free voice services such as Skype, and are often also users of money transfer services such as Western Union.

While Skype's Send Money service may be relatively convenient - especially where both parties already operate PayPal accounts - the total cost of remitting funds in this way could make or break the service. Since Skype users are more likely to top-up their accounts via PayPal than any other payment channel, a reluctance to use PayPal is unlikely to be a problem.

Send Money potentially has everyday uses such as making it easy to split a restaurant bill or reimbursing a friend for a concert ticket they bought for you, but once again cost could be a barrier: if it is cheaper to make a cash withdrawal from a nearby ATM, why mess around with Skype?

The main attraction of Skype is its low cost, so it seems reasonable to assume that its users are price-sensitive.

More details are expected within a month, but it could be significantly longer before the service starts. Send Money was first revealed during an eBay financial analyst conference in May 2006.

The proposed facility echoes an aspect of Skype Prime, the recently announced service that allows users to charge for calls made to them, for example as a way of billing for advice. Skype Prime deducts the cost from the caller's Skype account and credits it to the called party's PayPal account.