Mega online payment provider, Paypal, has conjured up a Facebook application which allows Facebook users to send money to their friends. As long as the funds come directly from your bank account or Paypal balance, there are no additional fees. The company has posted what amounts to a press release on their blog.

The plainly named application, Send Money, may be a way for Paypal to harbor some good will for the holidays. The application allows you to send money as a gift to any of your Facebook friends. Included with that gift is a personalized, electronic greeting which gets posted on the recipient's Facebook wall. The greeting itself is optional while your personal message and gift amount are kept just between the two of you.

Leveraging Facebook, a service with 800 million users, sounds like a good way for Paypal to publicize itself. In order to accept the money, recipients must either have or create a Paypal account. So, in order to receive their gift, reluctant users who were once luke-warm to the prospect of Paypal may actually warm up to the idea once they go through the steps of creating an account. Smart.

Here's how it works, according to Paypal:

You can send a card with money or just send money.

To send a card with money:

Choose a card and personalize it with a message or a photo or a video
Choose who to send the card to from your list of Facebook contacts
Enter the amount of money you want to send
Login to PayPal to complete the payment. If you don't have a PayPal account, it takes a few minutes to sign up for one.
After your payment is complete, your card is sent.
The card is posted on the receiver's wall and an email message is sent. PayPal will also send a separate payment notification to the receiver.

To just send money without a card:

Enter the amount of money you want to send
Login to PayPal to complete the payment. If you don't have a PayPal account, it takes a few minutes to sign up for one.
After your payment is complete, your notification is sent.
A notification is posted on the receiver's wall and an email message is sent. PayPal will also send a separate payment notification to the received.