By Dave Carpenter

The Associated Press

C H I C A G O, March 8  Now you can send birthday cash, spending money for your college student or repay your friends via e-mail.

And if youre lucky, you might log onto the Internet one morning and find a message saying the equivalent of Youve got money.

Bank One, the fourth largest U.S. bank, with assets of $256 billion, has become the latest and biggest company to allow people to send money via electronic mail.

The Chicago-based banking corporation, which announced its eMoneyMail service today, hopes to get the jump on other leading financial institutions in an area it says has huge potential  not only for person-to-person payments but for companies sending rebates or refunds to their customers.

Lend to a Friend

Sending money by e-mail joins a dizzying and fast-growing array of Internet financial services.

Its the coming thing, Robert Sterling, financial services analyst for New York-based Jupiter Communications, said of e-mail payment. Its important to get in on the ground floor.

Bank Ones new Web site, which made its debut unannounced last Friday, appears to be useful for person-to-person payments, he said.

With its product, Bank One enters a field dominated since its emergence last year by X.com Corp. and PayPal.com, which merged last week. The combined company, X.com, claims to be the leading method of online payment in the Internet auction market, including eBay.

Fees Comparable to ATMs

Under eMoneyMail.com, anyone in the United States with a checking account or a Visa card can send or receive up to $500 in cash at a time.

Heres how it works. The sender goes to www.emoneymail.com and chooses whether to pay by Visa credit card, Visa debit card or checking account. He then specifies an e-mail address for the receiver and the amount to be sent.

The receiver then gets an e-mail message that money has been sent, clicks on an attachment with a link to the eMoneyMail site and indicates which of four possible ways she wants to be paid  the three cited above or paper check sent by surface mail.

The sender pays a $1 fee for each transaction; the receiver pays $1 only if a check is requested.

The money would become available the next business day at the earliest, Bank One officials said. But they say research indicates consumers wont use it mainly to get cash but want a secure, convenient way to make payments to others.

While X.coms service is similar, Bank One claims that its name as well as its 128-bit encryption  the highest commercially available Internet security standard  provide an extra measure of security and confidence that should help attract more than its share of customers.

Having a bank brand instantly gives us a level of credibility that I dont think you can get by establishing a company out of thin air, said Dean Lehman, senior vice president for new product and service development.

The bank company, he said, also is seeking partnerships in the new venture from among companies that now send checks to consumers.

Limited Comfort Zone

Analyst Brook Newcomb, who follows online banking and bill payment for Forrester Research in Cambridge, Mass., said that while the move positions Bank One to reach millions of potential future customers, the immediate market may be limited.

Its going to be people who are comfortable using the Net to provide money, and theres only a small minority doing that now, he said. I dont imagine theres going to be a whole bunch of people signing up right away to do this.

The financial institutions with a stake in the business disagree.

Palo Alto, Calif.-based X.com says both it and PayPay have been attracting more than 10,000 new users a day, a growth rate that doubles each month. Bank One points to research that indicates one American adult in three uses e-mail and one in five uses financial services online. Lehman compares it to the initial use of automated teller machines in 1970.

How could we have known what ATMs would have become? he asked. People are getting comfortable with this kind of thing. I think were opening up a whole new area of Web payments.

http://abcnews.go.com/sections/tech/DailyNews/ecash000307.html

-- Jen Bunker (jen@bunkergroup.com), March 09, 2000