(June 17, 2009) MasterCard Inc. on Wednesday announced its person-to-person payment service for mobile phones has launched in the U.S. with one issuer on board and an untold number waiting in the wings. The card network’s Mobile MasterCard MoneySend service, which has been in the works for at least a year (Digital Transactions News, June 19, 2008), relies on its established MoneySend P2P platform, which processes transactions primarily in Asia and Europe.

The mobile version allows users to transfer funds on their handsets using text messaging, a mobile Web site, or a downloadable application, and works with any mobile phone. Registration to use the service is quick, says Josh Peirez, group executive of innovative platforms at MasterCard. “You can be up and running in a matter of a few minutes,” he says.

The new service follows on the heels of an announcement by the three largest wireless operators in Canada that they have launched a mobile P2P service in that country (Digital Transactions News, June 15). Like Mobile MasterCard MoneySend, the Canadian service from Bell Canada (BCE Inc.), Rogers Communications Inc., and Telus Corp. links to a prepaid MasterCard product. The latest announcement also comes as payments-industry experts ponder whether mobile devices can help make P2P, traditionally a service plagued by scanty profits, pay off. “I struggle with the case for P2P, particularly domestically,” says Nick Holland, who follows mobile payments as a senior analyst at Boston-based Aite Group LLC.

The sole issuer participating in Mobile MoneySend so far is The Bancorp Bank, a subsidiary of Wilmington, Del.-based The Bancorp Inc., which provides prepaid accounts in which and to which users store and send funds. Peirez says more issuers are on the way, though he won’t say how many have signed up so far. “We’re working with a number of our issuers to use the platform,” he says. “There are a number that are past the point of decision.” Peirez says the service’s reach doesn’t depend on the number of participating financial institutions. “Right now any consumer who wants to use the service can, on any device,” he says.

Users can fund their prepaid accounts with any MasterCard card account or from a checking account. Recipients of money can access their funds by moving the money from the prepaid account to a checking account. Recipients can also get a prepaid card linked to The Bancorp Bank account. And, with the account number, they can make online purchases. As more issuers sign up to offer the service, some may enable direct funds transfers from a sender’s existing MasterCard or checking account to a recipient’s MasterCard or checking account, Peirez says.

Consumer pricing is set by each bank. For now, senders pay The Bancorp Bank 29 cents per transaction for transfers up to $50. The fee goes to 99 cents for amounts between $50 and $200, and to $2.95 for sums over $200. It’s free to receive money. MasterCard, which is relying on carrier connections and other technical resources from Obopay Inc., a Redwood City, Calif.-based mobile-payments processor, will collect undisclosed fees from each participating institution.

Aite’s Holland says such services in the U.S. are up against a number of easy alternatives, such as checks, that aren’t readily available in other countries where mobile P2P might fill a void. “Even the underbanked [in the U.S.] are extremely well-served by other channels,” he says.

Still, he’s withholding a verdict for now on Mobile MoneySend. “The proof will come from who uses it, the adoption figures,” he says. “And it will be interesting to see what other issuers take it up.”