Facebook launches payments between friends service

Social Networking site Facebook is now offering its users the opportunity to share cash with each other, real cash that is.

You can send and receive small payments via a Facebook application called Buxter and the company behind Buxter that will process the transactions is online payments company ClickandBuy.

Setting it up is easy. If you already have a ClickandBuy account, and millions of people across the globe do, then all you have to do to take advantage of the service is set up your Buxter account on Facebook.

If you don't have a Click and Buy account then you need to set one up before you can load cash in or out of your Buxter account.

Transactions on the Buxter system are limited to a maximum of 50 euros or less and are free to process between friends although there are small fees (minimum of 2 euros) for transferring money out of Buxter and into your bank.

You can't make purchases from anywhere though; you will only be able to 'trade' with your friends on Facebook.

To send cash to a friend you simply select your friend's name from a drop down menu and enter the amount you want to send. Easy!

"People share their statuses, their information and their pictures on Facebook so the question is why not share money there too?" said Christian von Hammel-Bonten, senior vice president at ClickandBuy.

He hopes people will use the service to share expenses for things like cinema tickets and restaurant bills or small gifts; it's not designed for anything more than that.

"We're not trying to compete with national banking systems. This is not somewhere to pay your gas or rent" he said.

To receive any cash you send to a friend they just have to accept the Buxter application and enter an email address.

That friend will then be free to transfer the money to any of their friends or into their bank account if they wish.

"Buxter is the application that will see Facebook members use the platform not just as a way to stay in touch, but also as a fast, easy and secure way to exchange money or buy and sell products or services" said Charles Fraenkl, chief executive of ClickandBuy.

The only currencies offered by the service at the moment are US dollars and Euros but support for the UK pound will be added in the coming weeks.

It will be interesting to see how many Facebook users end up using it.