The service, called c2it, allows customers to transfer cash online from a bank, brokerage or credit card account to a recipient's designated account through Citibank. c2it is available to anyone in the United States with an email address, the company said.
Citigroup, based in New York, is joining the growing number of companies looking to tap the online payment services market. Companies such as eBay-affiliated Billpoint and PayMyBills.com have become popular as they set their sights on taking a share of the billions of dollars generated through private transactions each year.
But while companies have flooded into the industry, no clear leader has emerged, and obstacles remain. Many consumers are reluctant to change the way they conduct their financial affairs, while others worry about security and question whether a site outage would prevent them from accessing their money.
But Citigroup executives say they hope the financial institution's well-known name will increase interest in the payment method. Citigroup will start with a potentially big customer base, as the service will also be heavily marketed under the brand name AOL Quick Cash to America Online's approximately 25 million subscribers, said Anthony Jenkins, a c2it executive.
"The new service will simplify the way users shop online, pay utility bills and transfer funds to individual accounts," Jenkins said. "It occurred to us that the Internet could continue to simplify people's lives like ATMs have done. c2it is the next tool in this effort."
c2it will be free for the first three months, and then Citigroup said it plans to charge a fee of $2 per transaction to the sender. But executives said the price could vary depending on the other Citibank products a customer uses.
Though the c2it service is currently being offered only to U.S. customers, Citigroup said it expects to provide international services sometime next year. Also in the near future, c2it users will have access to a family of other Citigroup financial products, services and financial management tools via links to several Citibank properties, including MyCiti.com, ClickCredit.com and Account Online, the company said.