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Idealab launches online bill payment service

The Internet incubator introduces PayMe.com, an online service that allows consumers and small business owners to send and pay bills.

Internet incubator Idealab today launched PayMe.com, a new online bill payment service.

As previously reported, PayMe.com, the first company launched by Idealab's Silicon Valley office, allows consumers and small business owners to send bills to other consumers. The bill recipients can pay the bills using a credit card at PayMe.com.

"We've all participated in group gift giving and have been in the awkward situation of collecting money from friends," PayMe.com founder Dan Grigsby said in a statement. "PayMe.com solves this problem by offering a simple and secure way for people to request payment and collect funds."

After receiving payment from bill recipients, PayMe.com will directly deposit the payment into the bill sender's bank account or send them a check. For now, the start-up is offering the service for free.

Although PayMe.com and Idealab plan to market the company's services to both online and offline consumers, it might have the biggest effect on online auctions. To date, most consumers have had to pay for their online auction purchases offline via personal checks or money orders.

Amazon.com introduced a service to allow its auction and zShops sellers to accept credit cards online last fall. Although online auction leader eBay plans to introduce a similar offering, the service won't debut until sometime during the second quarter of this year.

Idealab opened its office in Sunnyvale, Calif., last September.

News.com's Melanie Austria Farmer contributed to this report.