Square Inc., the company that delivered a dongle that transformed tablets and smartphones into point-of-sale systems for small retail shops, is now offering an easier way to send cash to peers.

Square Cash is an easy way of sending cash online simply by using your email.  No need to set up anything, no need to sign up, no apps to download, just send an email using your computer, tablet, or phone.

How to use Square Cash

Using your email account, just enter the email address of the recipient on the “To” field, “cash@square.com” in the “CC” field, and on the subject field the amount you want to send.  You can leave the body of the email blank, or write something to inform the recipient what the money is for.

If it’s your first time to use the service, Square will email you a link to its service that will allow you to link your debit card, meaning you’ll be inputing your debit card information. This is a one-time thing, so you don’t need to go through this step for subsequent transactions.

The recipient will receive two emails, one from you and one from Square.  He or she will them opt to either accept or decline the payment.  If it’s the first time to receive payment via Square Cash, he or she will also be asked to link his or her debit card to receive the payment.  The payment will then be reflected on the recipient’s account within one or two days.  By receiving Square Cash payments, the recipient will then be able to send payments via the service as well.

“I tested Square Cash, sending and receiving money in amounts ranging from $10 to over $1,000, with eight people, and it worked rapidly and flawlessly. I can recommend it for anyone who needs to pay a small debt, give a cash gift, split a bill, or send cash quickly and easily,” Walt Mossberg of AllThingsD stated.

He also said that his friends, who he tested the service with him, were generally wowed by how easy it is to send and receive money.

Square Cash caveats

First off, the simple verification of your debit card will only allow you to send a maximum of $250 per week.  If you want to send more, or increase your weekly limit, you either need to give Square your Facebook credentials, or provide your full name, date of birth, and the last four digits of your Social Security number.

Then there’s the issue of trust.  Though Square has been handling credit card transactions in brick-and-mortar stores, some may be a bit skivvy about allowing it to verify their account balance to check if there are sufficient funds to push the transaction through, but Square promises that they do not see the person’s bank information.  The same goes for when you choose to link your Facebook account to Square Cash.  It says that it will not pass information to Facebook, or post your Square Cash activities, or financial status on the social networking site.

And finally, at launch, there will be no way to see your Square Cash history, you just have to rely on your emails to keep track of your transactions, and that it doesn’t promise to pay you back in case of fraud, but it can reverse the transaction.  For now, you can only link one debit card to one email address, and it supports only Visa or MasterCard debit cards, and will be available only in the US.

Is it free?

Yes, Square Cash is a free service, and no fees will be deducted when you use it.  So how will Square monetize the service?

Square says it will soon offer a paid, premium version which will have more perks like the ability to use Square Cash to send payments internationally.