Obopay review: Obopay

Obopay claims to be the future of wallets. A sort of Paypal for cell phones, this relatively new Web service lets you send and receive money via your mobile phone. First, you sign up online, and then choose your Obopay access method: through text messaging, the WAP interface on your mobile browser, or the Obopay mobile application available only on certain phones and through certain providers. Since the majority of cell phones offer text messaging, Obopay can effectively work on all cell phones. Obopay also offers an optional prepaid Mastercard that is then tied to your account--a clever method of money management for teens (or even for yourself!) The service is free, not including a few service-related fees (that we'll address later). When you sign up, Obopay gives you a $5 bonus that's immediately accessible.

We tested the service with two Verizon Motorola Razr V3c cell phones with the mobile Obopay application. The application's interface is laid out well, with bold, legible text and an easy-to-navigate menu. Program options include: Send Money, Get Money, Balance, History, Refer Friends, and Help. These options are fairly self-explanatory.

Sending money couldn't be easier. You enter your recipient's phone number (make sure he or she has an Obopay account, too), enter the amount of money you wish to send, enter your PIN number (which you establish with Obopay during sign-up), and hit Send. Note that there's a 10-cent fee every time you send money. This may not seem like a lot, but it could add up over time. Also, you can also send money through the Obopay Web site. Almost immediately your recipient will receive a message confirming the transaction, and alerting them to the availability of the funds. If you happen to need some cash yourself, you can also send a message to a friend or a parent via the Get Money feature. Even when sending a Get Money message, you'll have to enter your PIN.

There are other ways to add money to your Obopay account. You can add money via a debit or credit card, but you'll be charged a 1.5% fee (based on the total amount of your transfer), or transfer money from a bank account, which is free. You can even arrange for your employer to deposit your paycheck directly into your Obopay account. Combined with the prepaid Mastercard option, this is an easy way to manage your finances. You could give yourself an allowance of $200, tied to the prepaid Mastercard. Then when you run out of funds, you can easily transfer more money to the card via Obopay. Obopay funds can also be transfered to a bank account, or withdrawn via ATM by using the prepaid Mastercard.

There are, however, quite a number of restrictions on the amount of money you can move back and forth. If you use a debit or credit card to add money to your account, you can only transfer once a day, up to $300 per week. There's a $200-per-week transfer limit from your Obopay account balance to a bank account, and there's a $200 daily limit on ATM withdrawals. Also, you can spend at most $300 a day using the prepaid Mastercard. With these restrictions, Obopay is obviously not meant to replace your wallet but to supplement it. It could also help serve to curb your spending habit.

Overall, we're quite pleased with the Obopay service. It delivered on its promises, and money transfers went quite smoothly. However, we can't help but be disappointed by the amount of fees involved in the process--especially if you count text messaging and data fees along with Obopay fees. Sure, the fees may seem small, but sometimes every penny counts. If convenience is more important, however, then Obopay may be worth the price.