Web Watch

For individuals, remotely exchanging money remains a hassle, and sometimes a pricey one. PayPal has been on the scene for years but it was never geared to work with banks. Plus, for it to work, both parties need to have PayPal accounts, (although credit card transactions can be facilitated even if one party doesn't have an account). At least one new service is changing this landscape and banks of all sizes are signing up.. The first week of November, the $279 million Denison State Bank, Holton, Kan., rolled out a new service designed to facilitate these everyday money transactions. The service, named "Popmoney," works like this: Say two people want to exchange $20 at a rummage sale. If the buyer's bank has Popmoney and she finds herself without cash, all she needs is the seller's email address or cell phone number. The buyer can then send an email or text to her bank with simple instructions for transferring the $20. Popmoney works through the bank's existing online banking service.. Matt Taylor, senior vice president of marketing and online services for Denison State Bank, said the bank has never offered a transaction technology that reaches beyond bill pay or funds transfers between accounts within the bank. The bank's web developer, Intuit, suggested the service.. "At the macro level it is a response to what we're hearing from customers," Taylor said. "The first question for the bank was 'how much will it cost to get started?' and the cost of entry was very low. Popmoney requires hardly any administration. Given its low cost, the decision to try it out was easy.". That the transaction originates from a customer's bank makes all the difference, said Tom Roberts, senior vice president of marketing at CashEdge, Popmoney's parent company, which was recently bought by Fiserv. "We're leveraging the current financial institution relationship that you have," he said. "And it's done within a bank's existing web and transaction infrastructure, which can create opportunities for banks to draw fees from the service.". More fee opportunities will arise as more features are added to the service, Roberts said. Namely, Roberts said real time settlement and international transactions are on the horizon, and fees for these services are easily justifiable.. "The opportunity for bank customers to facilitate international transactions is something we think will be a big deal," Roberts said. "Right now those services can be very expensive, and [Popmoney] will cut the cost of that transaction.". Other international payments in the pipeline involve Visa and the ability to push funds onto a credit card.. "If you have a child traveling in Europe, and they suddenly need some money, there will be a way to almost instantly apply funds to an existing card," Roberts said. "Western Union and traditional wires are much more expensive, and there is room for fee collection in those transactions.". Gift cards present yet another potential fee source. Roberts said Popmoney can be used to send money or stored value cards via email templates that mark special occasions, like birthdays. A handful of banks charge a small fee for their use.. Many of the burgeoning features will be the result of combining Popmoney with zashPay, a similar service that is also owned by Fiserv. Other features down the road will include business-to-business, invoicing and pay requests, and retail. At the moment, however, Denison State Bank is focusing on the basics and keeping the service free.. "We'll see how it goes," Taylor said. "The first challenge is to get our customers to understand how it works and learning which ways they want to use it. It's more for people who don't have the immediacy to move money to another person, but it's still very convenient." .Twitter watch: State Bank of Cross Plains, Wis.. The State Bank of Cross Plains, Wis., is one bank unafraid to voice an opinion or two through social media. The bank recently used its Twitter feed, which boasts more than 750 followers, to insert itself into the discussion of the much publicized "Bank Transfer Day." Bank Transfer Day was a consumer initiative organized largely on Facebook and Twitter that called for customers to move their accounts from large banks to credit unions by Nov. 5, 2011. (See article on page 18.) Although community banks were not completely excluded from the effort, the focus was mainly on credit unions. State Bank, on the days leading up to November 5, launched several tweets in an effort to stick up for community banks.. "Bank Transfer Day, a campaign to switch from 'big banks' to CUs, is growing. Community banks are a great alternative," read one such tweet, which ended with a link to the Independent Community Bankers of America's community bank finder.. More aggressive tweets followed: "Cmmnty bnks pay taxes & support ur local & our national economy. Move from mega & find ur cmmnty bnk.". (For the uninitiated, tweets are limited to 140 characters, hence the shorthand).. A tweet sent to State Bank inquiring whether it gained any new customers on November 5 was responded to instantly, and with a slight wink: "It was business as usual for us.". The bank also uses Twitter to promote its blog. Named "Wealth Matters," the frequently updated blog is written by the bank's trust officers and features financial advice, comments on current events, and notes on the industry.