According to PayPal, a recent study of global adults suggests there's more than $51 billion in unpaid small debts between friends and family.
Naturally, PayPal wants a piece of all those IOUs. The company announced Tuesday the launch of PayPal.me, a mobile-optimized peer-to-peer payments platform designed to reduce the friction and awkwardness of asking for a pay back.
Similar to Square's Cashtags, PayPal.me utilizes a short customized URL (paypal.me/johndoe, for example) that users can share with others via text, email, instant messenger, blogs or social media. The link takes recipients to portal where they log into PayPal, enter the amount owed and then send the money on its way.
PayPal already offers an online experience for requesting money, but it requires users to log into the PayPal website and enter another user's email address to create a request. PayPal.me has far fewer steps in the process.
The catch with PayPal.me is that it does require users to have a PayPal account, unlike Square Cashtags. If a person sending a payment is not a registered PayPal user, the site redirects them to another portal where they can quickly set up an account, which obviously ropes more people into the PayPal ecosystem.
Beyond the registration requirement, PayPal.me also differs from Square's Cashtags on both price and scale. Square's product is more competitively priced at just a 1.5 percent fee for businesses and zero fee for non-business money transfers. Meanwhile, PayPal.me charges users the standard Paypal fee of 4.4 percent plus 30 cents per transaction in the US.
In terms of scale, the Cashtag product only works with US banks, credit and debit cards -- as is the case with PayPal's other social lending app Venmo -- whereas PayPal.me is available in 18 countries, giving the platform an instant global customer base.