Citigroup Inc. said today that its person-to-person payment system, dubbed c2it, is available to subscribers of Microsoft Corp.'s MSN Internet service, allowing its more than 200 million users to send and receive cash via e-mail.
The New York-based financial service provider said the agreement with Microsoft is part of a strategy to reach new audiences through "target-focused partnerships" with online brand-name companies.
In October, Citigroup also signed with Dulles, Virginia-based America Online Inc. to offer its online-payment system to the service provider's 26 million subscribers.
"As a leading financial services firm, we understand that visibility and accessibility are needed to change consumer perceptions and, ultimately, behavior as they increasingly do more on the Internet," said Antony Jenkins, chief operating officer at c2it.
The person-to-person payment system works via an e-mail service that allows users to send messages instructing banks to transfer money from their accounts, such as a credit card or debit card account, to another person's or institution's account. Recipients of the money are notified by e-mail that money is waiting for them, and they can obtain it through an electronic account or a paper check.
Citigroup, which launched the c2it service in October, also announced an agreement with AuctionWatch to embed the electronic-payment service into AuctionWatch's e-commerce technology.
Electronic transfer payment systems have gained in popularity recently. Others include X.com Corp.'s PayPal, a service that's popular with online auction users and small online businesses, and Bank One Corp.'s eMoneyMail.
San Francisco-based Wells Fargo & Co. and eBay Inc. in San Jose also recently penned an agreement to offer BillPoint Inc.
Erik Jorgensen, general manager of the consumer financial products group at Microsoft, said the Citigroup venture offers "a key financial management tool" for MSN's 230 million monthly visitors.
"This alliance extends our commitment to helping consumers manage their money anytime, anywhere and on any device," he said.
Citigroup also announced that it is doing away with a US$2-per-transaction fee for its electronic-payment service. As of today, senders will be charged a fee of 50 cents, up to a maximum of 2.2 percent of the amount of the transaction.
Except for frequent users, PayPal is free. Bank One charges $1 per eMoneyMail transaction.
In addition, Citigroup outlined other upcoming expansions to its online payment system. Those include:
The ability for U.S. residents to send money from their desktops to recipients in 30 countries, scheduled for mid-May.
An account-based card, scheduled for the third quarter.
Expanded international use of the service, planned for the end of the year.
A line of credit linked to the account-based card, also planned for the end of the year.