Owe Someone Money? Just Bump Your Phones

PayPal’s new iPhone application could finally change that. It promises to let you quickly divide a restaurant bill and send a friend the portion you owe just by bumping your iPhones together.

To send money, users choose a recipient from their cellphone contacts or bump two phones together. For that, the app uses technology from Bump Technologies, which developed it to swap contact information between two phones. The money is transferred immediately.

But now might be the time, for a few reasons. PayPal’s iPhone app is easier to use than the text-message service, in part because people do not have to remember the exact language to use in their messages. And most are familiar with PayPal —80 million people actively use it on the Web and 200 million are registered.

The number of PayPal mobile transactions climbed from 24 million in 2008 to 140 million in 2009, according to Eric Duprat, PayPal’s general manager for mobile. In addition to person-to-person payments with cellphones, PayPal has ventured into mobile commerce. Last year, people spent more than $500 million using eBay’s mobile apps, which incorporate PayPal.

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