The Money Is in the Email

While you can buy a $500 iPad at Amazon.com with a single click, sending even small amounts of cash to a friend or relative is still often a tedious and slow task. In most cases, you wind up doing exactly what you would have in 1957 — writing a check and mailing it. The recipient then has to cash it or deposit it in her bank account.

image

An app, available for Apple and Android devices, lets you enter an amount and create email to send.

But starting Tuesday, you can just email cash, free of charge, directly from your debit card to anyone else’s, regardless of what bank each party uses. There’s no login or password to remember and no special software or hardware required — you just use email. It works on both ends using any email service or program on any email-capable device, whether a computer, a smartphone or a tablet.

This new service, called Square Cash, comes from Square Inc., best known for equipping small brick-and-mortar merchants with smartphone-swiping devices that allow them to accept credit cards, and with tablets that act as sophisticated cash registers.

Square Cash permits you to send up to $2,500 a week in several transactions or all at once. At launch, it works only in the U.S., and with debit cards carrying either the Visa or MasterCard logo. It isn’t meant for buying things from merchants, online or off, only for person-to-person cash transfers.

There are other services that allow you to send money from one person to another digitally. You can do it via PayPal, or via a newer service called Venmo, which PayPal is in the process of acquiring. But I believe Square is simpler and more private. For instance, PayPal places received money in a PayPal account and you must transfer it to your bank in a separate step. Venmo has a strong social component that encourages users to post when payments are made.

I tested Square Cash, sending and receiving money in amounts ranging from $10 to over $1,000, with eight people, and it worked rapidly and flawlessly. I can recommend it for anyone who needs to pay a small debt, give a cash gift, split a bill, or send cash quickly and easily.

I sent several $5, $10 and $25 amounts, and asked for and received, all or part of the money back, in order to test receiving money. I also used Square Cash to settle a real bill, with a friend, to pay my half of a shared $2,223.76 fee she had covered. It worked fine in every case.

The people helping me test were generally wowed. One called it “slick.” Another replied: “Done. Two secs.” A third, with whom I had trouble using PayPal last year, said she’d use it “1,000 percent.”

image

An email sends cash via Square Cash, where the money will be available in the recipient’s bank account within one to two days.

There is one big caveat: You have to trust Square. The company has a strong track record in its merchant business, so it isn’t brand new to the money-transfer business. And Square says it has strong security measures and close human and machine monitoring for possible fraud. If fraud is suspected, the company says it can and will reverse the fund transfer. Still, digital services do get hacked, and email can be manipulated by thieves. The service notifies you via email or text that it appears you have sent money, which gives you a chance to cancel a transaction that didn’t come from you or was a mistake.

So, if you don’t trust Square to defeat such things, you shouldn’t use Square Cash.

Here’s how Square Cash works. Say you want to send $47.12 to your sister. You just compose an email with her email address in the “To” field and, in the “CC” field, you enter “cash@square.com.” In the subject field, you enter the amount you’re sending — in this case, “$47.12.” You can leave the message body blank, or add a note explaining you’re sending the money and why. Then, you just press Send.

If this is your first time using the service, Square will email you a link to its service, where you’ll be asked to enter your debit-card information. This is required one time only.

In seconds, Square verifies the debit card and checks that you have sufficient funds, using existing, routine Visa or MasterCard procedures, and sends an email to your sister. (Square says it never knows how much is in your account, and it encrypts your card number.)

Your sister will receive two emails: The one from you and a second from Square saying you’re sending her the money. If she accepts the payment and it’s her first time using the service, she will be asked to click a link to Square and enter her debit-card information.

Once that’s verified, the transfer is made, and the money will show up in her bank account in one to two days. She will also be empowered to send money herself.

No other account setup is required. You never need to create, or enter, a login or password. And the money goes straight from bank to bank. Neither party needs to create a fund balance with Square.

Square says most payments appear in the recipient’s account in one day. And it says a significant minority of payments appear immediately, something it hopes to make commonplace as soon as possible.

There’s one more twist, however. This simple verification system works only for transfers of up to $250 a week. To qualify for the full $2,500 limit — which is also free — you have to provide some added information, one time only. You can give Square your Facebook credentials, or provide your full name, date of birth, and the last four digits of your Social Security number.

image

The email on the receiving end.

If you choose the Facebook option, Square says it passes no information to Facebook at all and never posts what you’re doing on Facebook, or shares your financial activity. It says it merely looks at your Facebook profile and activity, as a Facebook friend could, in order to verify that you are a real person, with an established account there.

Square Cash does have apps for Apple and Android mobile devices, but you never need to use them. All they do is let you enter an amount you wish to transfer and automatically create an email, ready to send.

So how does Square make money from Square Cash? It says it has no plans to send you ads or offers, even for merchants with whom it does business. Instead, it plans to offer paid, premium options. One example: The ability to use Square Cash internationally.

Square Cash does have some downsides. At launch, there’s no way to see a history of your transactions. Square says your past email shows that. And the company makes no promise to pay you back from its own funds in the case of fraud, only to reverse the transaction. It also has no limit on your liability from fraud. And at launch, it only links a debit card to one email address at a time, so sending from, or to, an unlinked email address can require a new setup.

However, Square Cash is the quickest, simplest method I’ve seen for sending money from one person to another.

Email Walt at mossberg@wsj.com.

27 comments
StevenLandsburg
StevenLandsburg

In my experience, Square Cash is so unreliable that it's worse than useless.  I am organizing a social event and receiving payments from about 180 people to cover their hotel rooms, etc.  In the past, we've used Paypal for this.  This year I made the mistake of asking people to use Square Cash.  The result:  People send me money, and then, two or three days later, Square reverses the transaction, sending them their money back.  This happens about 60% of the time.  This means it's just about impossible to keep track of who's paid and who hasn't --- I get the notification that, say, Walt Mossberg has sent me $300, I send him an acknowledgement, and then two days later, Square notifies me that they've sent him his $300 back.  Inquiries to Square are met --- every time --- with the one sentence explanation that "There was an issue".  I can't even figure out whether the issue is at my end or the sender's end, and it's absolutely impossible to get any further response out of Square.  Note that they have NO PHONE NUMBER, which means that when things go wrong with your money, there's nobody to talk to --- just an email address that elicits automated replies saying "There was an issue".  I very much wish I'd never heard of Square Cash.

n13
n13

Sounds nice but this sorely needs two factor authentication.

What if I hack 1,000 Gmail accounts and 100 of them have in the past signed up for square? 

You might say well a normal person wouldn't get away with it as they have to have a receiving account and so on. But if history has shown us anything it's that computer criminals will find ways to make this work. In this case, I'd set up a huge heist so by the time transactions are reversed and so on, it's too late.

For example, I would silently take over emails and just filter out or modify emails from square Cash that I don't want the real user to see.

Even better - how about I send YOU an email saying somebody sent you money. Well then you have to enter your debit details for Square Cash. Then I can go and use your email account to send money to myself. Multiply by 10,000 and we're talking some real money. 

Russian hackers will beat this system in minutes.

www.QuickFlipp.com
www.QuickFlipp.com

-

                                               but will it remain always free?




TakesPics
TakesPics

You do realise that this an amateuristic solution to a problem which was solved over a decade ago in Europe? We can wire transfer to any bank without costs, transfer is done within a day, all in the comfort of our home thanks to our -also free- online and mobile banking. 

It seems the US banking system still has a loooong way to go...

sketharaman
sketharaman

@TakesPics Wire transfer involves the payer knowing the bank account details of the payee. Getting them and entering them on the bank website can be painful or error-prone or both. In the case of SQUARE Cash, there's no need for any of that. You can send money to someone by knowing only their email address. Maybe the US payments system has a long way to go in doing complicated things that are highly secure. However, it can be beaten when it comes to simple and convenient, albeit not so secure, ways to make a payment.  

researchnick
researchnick

@TakesPics In addition, Canadians can already email each other money from one bank account to another. It costs a dollar a time, but it's been around for several years.

TheRealCBONE
TheRealCBONE

If it sends you a verification text for each transaction before completion, allowing you to cancel it if you want, it doesn't sound too bad.

If a shady server changed the amount and email address, I would still have to ignore the verification text and then not cancel it for it to actually go through.

Ridicuman
Ridicuman

The "Here’s how Square Cash works" section says how you use it, but not how it works.  Since (almost all) email is unencrypted and unauthenticated, don't we have to trust not just Square, but every mail server between us and them, and every user on the internet who can connect to any of these mail servers?

I'm just not seeing how this can work.  It sounds like sending cash by postcard.  Well, maybe not quite that bad, because you have to set up the endpoints on their webpage (over SSL, I assume), but still dangerous.  What if I send $50 to my pal, and a malicious mail server decides to change it to "$500"?

Security experts have long emphasized the importance of checking for the "HTTPS" or "lock icon" in our web browser, especially when dealing with money.  Isn't this one giant step backwards?  It's a little easier, sure, but so is stapling a $100 bill to the back of a postcard.  Even if you're not a security enthusiast, there are certain levels of security that seem pretty basic, that I'd not want to cross.  Sending cash over (non-PGP) email is one of them.

Sprae
Sprae

Look at Europe people. Their banking system can transfer within a day and most cases instantly. US banking payment system (bank to bank) is old and needs a kick in the...

BenBoyd
BenBoyd

needs to go international, support all visa and mastercards

chuck.krutsinger
chuck.krutsinger

Article says, "If fraud is suspected, the company says it can and will reverse the fund transfer."  And near the end, "And the company makes no promise to pay you back from its own funds in the case of fraud, only to reverse the transaction."  I'm confused.  If the transaction is reversed, I've been paid back.  What is the distinction you are trying to make?


bweezydp
bweezydp

How is it compared to Google wallet it sounds almost the same except free and no bank account?

hmurchison
hmurchison

Dwolla and FiSync is what people want.   If I gotta send someone money they don't want to wait two days for it.  They need it NOW.    Square must crap Candybars because they can deliver anything and the fawning press bows down to Jack Dorsey.   I want my money transfers to happen like we're in the 21st century.   It doesn't have to be free but please make it fast. 

GregMaletic
GregMaletic

@hmurchison This is for paying back small debts among friends. Who the hell cares whether it takes two days or not?

TheRealCBONE
TheRealCBONE

If you needed to send money nownownow, you wouldn't use this. You would pay extra for nownownow with someone else.

irontoby
irontoby

"One to two days". It's the same friggin thing in different packaging. I don't want someone to get their money in one to two days, I want them to get it now. The only ones I even know of trying to make that happen are Dwolla's FiSync which replaces ACH but I haven't heard anything from them in quite a while.

Anni
Anni

Never heard of Interac email transfers?

ia6196435
ia6196435

@Anni I've learned those poor knuckle draggers to the south do not possess our superior technology.

grkhetan
grkhetan

What if you need to change the debit card?

figers
figers

What stops someone from spoofing my email address endlessly?This article reads that I am on the hook for all fraud. Especially when they spend the money on the debit card before it can be reversed

bazaarsoft
bazaarsoft

@figers Exactly what I was thinking - if someone takes over my email account, then they may delete any confirmation emails before i have a chance to see them. They could then transfer money to another account until the limit is reached - withdraw the money and close the account all before I knew anything was wrong. Unless I'm missing something, this is a HUGE opportunity for account takeover.

TheRealCBONE
TheRealCBONE

The verification text. The $250 simple weekly limit and the 2500 full limit with extra information. Also, I imagine there are easier ways to rob someone for what amounts to petty cash.

pcreswick
pcreswick

Pretty sure that from 1957 until now cash means currency, notes and coins and sneaker-net is still the only way to transfer cash. 

grahamj
grahamj

Never heard of Interac email transfers?

daveahlman
daveahlman

Unless I missed it, I didn't see whether you said how the transaction is described on your bank statement.  Does it simply call it a Square transaction or does it somehow refer to the recipient (or the sender, if you are receiving)?

Trackbacks