Penn students may soon find themselves pulling out their cell phones instead of their credit cards at cash registers, now that XIPWIRE — a mobile payment company founded by a Penn alumnus — has launched its service in Philadelphia.

XIPWIRE is a mobile-to-mobile service that allows consumers and merchants to send and receive money through text messages. Transactions can be either person to person, such as splitting a bill at dinner and reimbursing a friend immediately, or consumer to merchant, such as buying gelato at Capogiro — one of the merchants that accepts the service.

To register for XIPWIRE, users text message “go” to 56624 to receive a temporary user ID to complete an online registration process. Users can choose a personalized ID and PIN number on The last step is to create a “mobile wallet,” which is a credit card, debit card or bank account linked to a XIPWIRE account.

When using the person-to-person option, a user texts “XIP [name] [amount]” to XIPWIRE’s number, 56624. The recipient then receives a text message requesting that he or she accept the payment, which can be done online.

For a consumer-to-merchant transaction, the user gives the merchant his XIP ID, the merchant verifies the ID and purchase amount and the user receives an automatic text message, which asks him to confirm the transaction with his PIN.

XIPWIRE will be free for users in 2010 and will start charging a flat 10 cent fee per transaction in 2011, according to Penn alumnus Sharif Alexandre, founder and CEO of XIPWIRE. Businesses will be charged one percent of each transaction amount in 2011 — significantly less than 2 to 2.5 percent credit card transaction fees.

XIPWIRE did a soft launch in January and found that the public was most concerned with identity theft, according to Sibyl Lindsay, co-founder of XIPWIRE.

For this reason, XIPWIRE uses PIN authentication so that money cannot be sent without authorization. Users also have two photos on their XIP account, so businesses can verify the user’s identity at the moment of the transaction.

Sarah Bonkowski, district manager for Capogiro, said the service is “really a lot easier than [she] thought it would be” and added that “people are really excited about it.”

Aside from Capogiro, other businesses that accept XIPWIRE include Richard Nicolas Hair Studio, Raven’s Lounge, Max Brenner, The Sporting Club at the Bellevue, Affordable Skin Care and MeMe Restaurant.

Nursing senior Lauren Bausback said she has found the service especially useful when she lost her wallet, since she was able to retrieve her money through her bank account linked to XIPWIRE.

The service is part of a growing trend in mobile payment services, including Amazon Mobile Payments Service, Obopay, Paypal as well as Venmo, founded by Penn alumni Andrew Kortina and Iqram Magdon-Ismail.

XIPWIRE spokeswoman Laura Van De Pette pointed to an industry statistic that it takes an average of 26 hours for a user to report a lost wallet, but the average time taken to report a lost mobile phone is just 68 minutes.

“Now you can leave your wallet at home,” Alexandre said, adding that he never carries cash.

“It’s that first XIP that gets everybody hooked,” Lindsay said.

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