First Data Corp.'s decision to introduce a person-to-person Internet payment system through its Western Union subsidiary adds another big name to the increasingly competitive market.

First Data, an Atlanta-based processing and payment service company, said its MoneyZap service will begin in July. Through Western Union, consumers will be able to send and receive money through e-mail.

Bank One Corp. has its own person-to-person payment service, eMoneyMail, which it says has proven popular. Wells Fargo & Co. and FleetBoston Financial Corp. are working with partners to facilitate such payments. Among nonbanks, companies offering this service include Propay.com and X.com.

Matt Golub, senior vice president of Internet commerce for First Data, said MoneyZap complements Western Union's other services, which let consumers wire money either by telephone or through Western Union offices. He said the new service is not meant to sap business from Western Union's other endeavors; rather, it is meant to appeal to clients who are more Internet-savvy than its typical customers.

Western Union plans to reach these people by advertising and through alliances with banks and Internet companies - such as Excite@Home, which will use MoneyZap as its preferred person-to-person channel.

"We are confident that we will find them," said Alan Silberstein, executive vice president at First Data, who oversees all Western Union activities.

James Van Dyke, a senior analyst at Jupiter Communications, said Western Union seems to have "the right idea" with MoneyZap. "We have seen a flood of new services" in the person-to-person market, he said. "This one has the right potential."

Mr. Van Dyke cautioned, however, that the company's clients generally are low-income customers who are less likely to be hooked to the Internet and that people with technology know-how might not think to turn to Western Union for payment services.

Some person-to-person services have focused on specific instances in which people need to pay one another online - such as sales that take place through auction Web sites. Mr. Van Dyke said there "aren't enough of these micro-markets" to sustain such companies.

Western Union, he said, has the means to make a broader business out of person-to-person payments. "The concept of P2P has to be taken to the next level to benefit from larger scales," Mr. Van Dyke said.

He predicted that First Data would not attain such scale on its own and that a more promising way to market the service would be through alliances with banks looking to add online person-to-person payments. First Data said this is indeed part of the plan.

First Data expects to reach what Mr. Golub describes as a "substantial number" of customers for MoneyZap in the next one to two years.

Mr. Silberstein said that "reliability, integrity, and a brand name" distinguish First Data's service from others. "We have been moving money throughout the world for years, and Western Union applies all this to MoneyZap."

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