Pay with your phone..... for a fee

Canada's major cell phone companies are about to launch a mobile payment system that will allow users to send, request and receive money via their cell phones. Zoompass will be available for Bell, Solo, PC Mobile, Rogers, Fido or Telus customers. You register online and then download the software onto your phone. You will then be able to send, request and receive money to other mobile phones via SMS text messaging, or if the other person has Zoompass, via email.

Money can be drawn from an account the user sets up or from their credit card. Users will be able to send or receive as much as $250 and hold as much as $1,000 in their account. Confirmation receipts for transactions will be sent by SMS.

For security, the user provides a PIN when running the software and whenever there's a transaction. The software will work on most smartphones, including BlackBerrys. An iPhone app is coming as well.

The service directly competes with companies like PayPal, but it provides a new way for friends and family to transfer money quickly and painlessly on the spot. A group at a restaurant, for example, could have one person pay the bill and the others send him or her what they owe instead of running to a bank.

A senior financial analyst said the service's biggest hurdle might be because of the fee structure.
Ahhhh....... there's the magic word. Fee. Each withdrawal will cost 50 cents from the account, or 3.5 per cent of the transaction if from a credit card.

Suddenly, I'm not that interested.

In time, cell phones will likely be equipped with the same technology as EasyPay or PayPass, where a simple wave of the phone over a reader will suffice to pay for goods. Hopefully once the banks get involved, the fee will disappear.