Send Money enables Facebook users to send their friends ecards with money, or just money, with the only restrictions being PayPal’s regular limits and the fact that there are fees for international transactions.
PayPal director of global communications Anuj Nayar told Mashable, “This is another way to personalize the act of giving money,” while senior product marketing manager J.B. Coutinho added, “Sending money, person-to-person, is free. If it’s funded by a PayPal balance or linked to a bank account, it’s free.”
Now we’ve long seen Internet commerce providers call something free when in fact the revenue stream is simply hidden from consumers.
PayPal earns interest on balances kept in accounts with the payments vendor; even when the money is technically only in PayPal’s hands for one to three days, the funds get moved into overnight investments to earn interest.
Overnight investments only add up to real earnings when large amounts of money are involved, and PayPal gets to grow its account base by making its services available to a larger audience through Facebook.
How will this affect Facebook Credits? Right now, not at all.
Send Money is designed for person-to-person transactions, while Facebook Credits is a currency used mainly for premium features within Facebook games and other apps. The real question to ask: Will Facebook and PayPal continue to become more intertwined?