The PayPal (NASDAQ:PYPL) stock went down by 1.15 percent on Tuesday after Google announced the launch of a new email feature that will allow users to transfer and receive money easily and without any fees. The PayPal stock closed at $42.10, down by $ 0.49! Over the last three months, the stock has traded between $39.31 and $43.07.
Google posted a blog on Tuesday saying that the new Gmail app on Android will allow users in the United States request or receive money as an email attachment. It works even if the receiver or the payer does not have a Gmail account. People in other countries won’t be able to use it for now, but that is sure to change soon.
Gmail Money Transfer Will Have No Fees
To make it even better, Google (NASDAQ:GOOGL) will not charge any fees. Users have been accusing the California-based online payment service that the fees they charge are way too high. Another charge against PayPal is that their exchange rates are low.
This new money transfer service of Google will work with other email services too. Recipients will be able to make the money go directly to their bank account. To use this, users will just need to set up a Google Wallet account, if they don’t have one.
PayPal’s Venmo Facing a Huge Challenge Now
In some areas, the new feature is already available on web browsers. Analysts and observers are saying this new addition will challenge the dominance of PayPal’s Venmo for mobile devices. Venmo is a mobile peer-to-peer payment app and social network. This is a key driver for the growth of PayPal, which is the leading person-to-person payments vendor in the world. Venmo has processed more than $5.6 billion worth of payment in the fourth quarter of this year. This is 126 percent more than the same period of last year according to the company’s earnings report.
PayPal (NASDAQ:PYPL) declined to comment on this latest development. However, they have also been busy making new offers to stay ahead of the competition. A while back, PayPal came out with One Touch, a faster online checkout option. Venmo too expanded with their “Pay with Venmo” services. With these developments, PayPal was expecting to strengthen their presence in the online transaction service.
But this new free money transfer service from Google may now change the equation.