It appears that they take payments in as deposits and then disburse the money when another user requests a withdrawal. This requires either a bank charter or a designation as a money transfer agency. Without one of those, they are running an unlicensed bank. You cannot hold the money as an intermediary in the US without satisfying one of those requirements. I don't see anything on the site about either one of them, but knowing at least a little about the capital requirements needed to get one or both of those I would doubt that they have them. Please correct me if I am wrong, I think mobile payments is an idea who's time is past due but its very difficult to pull off in the US.
I know the guys that make it, and they're solid. Check it out: http://venmo.com
It has been done before, but it hasn't caught on yet in the US. I'm not sure why. It does fine elsewhere - but the configuration is usually through the carrier.
Well, I would trust a notification of a text message than a submission of a form from a potentially phished account. Then the issue is stolen cards, and ramp-up of merchants and payers is a good way to limit risk.
I think this is a user issue. People don't currently pay with there phones. There are a bunch of options for it.
Stolen cards is a huge issue. I actually think being a smaller "Penn students and surrounding businesses" type of play would make it easier...there's less incentive for the online-only stolen card gangs to take over.
But what happens if you don't have a venmo account and you pay the restaurant and then decide when you get home not to create an account? Do they somehow charge you through your phone bill?
As a first time user, you can actually complete your purchase at the point of purchase. There's no pre-registration required and through texting and a phone call you can add your payment information and notify the restaurant of your payment.
