PayPal Offers iPhone TransactionsPayPal Offers iPhone Transactions

PayPay has unveiled a new version of its iPhone application that lets people transfer money by "bumping" two of the Apple smartphones.

The Bump feature in Version 2.0 of the Send Money app can move funds quickly between PayPal accounts by simply putting two iPhones together. The new application also includes a split check feature that lets users divide and quickly reimburse each other for the cost of a meal, including tax and tip, for up to 20 people.

A third feature, called Collect Money, lets a person request money from multiple people for collective purchases, such as gifts from a group. In addition, gifts of money may be sent immediately.

PayPal mobile transactions increased six-fold in 2009, rising to $141 millioin in 2009 from $25 million in 2008, according to the online payment service said. In releasing the new application, PayPal is hoping to keep the momentum going while trying to capture a bigger slice of the $119 billion ABI Research predicts people will spend through their mobile phones by 2015.

"PayPal Send Money lets consumers access their wallets through their phones," Osama Bedier, PayPal's VP of platform and emerging technology, said in a statement. "Because with PayPal, the wallet lives in the cloud -- the mobile phone is just one device customers can use to access it."

Other features in the new Send Money app include the ability to set reminders for recurring payments and to manage PayPal accounts. For international transactions, the application features a global currency calculator and 15 languages.

Send Money requires a PayPal membership and a PIN or password for every transaction to prevent unauthorized use. The application, unveiled Tuesday, is available free through Apple's App Store.

PayPal is not the only payment service targeting the mobile phone. Credit card companies, including MasterCard, Visa, and Discover Card, have launched mobile payment platforms.

Handset makers are also working at making it easier for people to buy with their phones. Nokia, for example, introduced last August a payment platform that lets people send money to others, pay for products in retail stores and online, recharge prepaid SIM cards, and pay utility bills. The platform generates revenue by charging transaction fees.