Money can be transferred to any other Serve user, just like with PayPal, although a limiting factor right now is that Serve is only available to U.S. residents. It will roll out to other countries later this year. Personal transfers from person to person are free for both parties, provided the money comes from the Serve account itself, or a bank account or via a debit card. Otherwise the same 2.9 percent charge applies (again waved for the next six months).

Perhaps surprisingly, near-field communications (NFC) isn't a feature of Serve--at least not right now. AmEx says it's going to watch the market to see what happens. NFC payments allow users to turn their phones into digital wallets, allowing them to waive phones in front of a terminal to pay for goods, rather than swipe a card. NFC is built into Google's next Android OS release (although whether phone manufacturers will incorporate the corresponding hardware is another matter). It's rumored NFC will also be arriving with Apple's iPhone 5.

Serve does offer apps for iPhone and Android, but these are largely account management apps that let users do things like check their balance, or send money to and from other users. Having this functionality built-in from the ground up is nice, and it's possible those cost-free transfers could lead to people borrowing and giving each other money via their phones, rather than using cash. But there's been a PayPal app for some time offering the same thing, and that hasn't brought about the downfall of bills and coins.

There is territory to be occupied in the online money transfer marketplace but Serve is a dart that doesn't even hit the board. Put simply, why would anybody want to open a Serve account? Until that question is answered, merchants are not going to be interested either. Any why didn't Serve just ?

The people behind Serve need to go back to the drawing board. Firstly, they've got to permanently undercut PayPal. Otherwise there simply isn't a reason to use Serve in the majority of situations online. Secondly, they have to show the way forward with NFC payments. Only then will they give us a reason to use Serve.