As cell phones become less like traditional telephones and more like all-in-one personal computers, I’m hardly surprised by the new gizmos and applications I hear about. Bt this one caught even me by surprise.

According to an article on May 13’s BusinessWeek.com, MasterCard is rolling out MoneySend, a service that allows cell phone users to transfer money by text message.

Insiders apparently claim that MoneySend will make sending money from person to person easier and more convenient than traditional methods.

Here’s how it works:

1. Using a debit card, credit card or bank account, a customer registers online for a prepaid account.
2. A user can then transfer between $1 and $500 to a recipient by simply sending a text message.
3. A representative from MasterCard calls the sender to verify the amount of money sent and the intended recipient. This information is protected by a personal identification number (PIN).
4. In order to complete the transaction, the recipient must register online to select an account into which the money can be placed.

As of now, the service will be available for a fee, but sources suggest that some participating banks may waive the fees (at least initially) to encourage people to sign on.

Are Money Text Transfers Safe?

Some experts worry that MoneySend will not catch on because of security fears; apparently, Americans have been slow to warm up to other online banking technologies. This is a major reason why the security features resemble those of PayPal, which many Americans are already familiar with.

A bigger concern might actually be how the banks, cell phone companies and credit card issuers will divide the profits from the new technology.

Potential Uses for Money Texts

Although cell phone money transfers may sound futuristic, they could offer real benefits to certain groups of people.

A press release from Obopay, Inc., one of the companies involved in MoneySend’s launch, suggests using the text transfer for:

• Scheduling children’s allowances
• Sending children money and monitoring how it’s spent
• Sending money to family members across the world
• Getting money to people in emergencies

The article reports that MoneySend will be available later this month. If you’re having trouble managing your money, and are in serious need of debt relief, learn what filing bankruptcy might do for you.

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