If you have a PayPal account and an iPhone, chances are you’ll never again be caught short of money when you’re out and about. PayPal has released version 2.0 of its Send Money application for iPhone, which means account-holders now have even fewer reasons to carry cold, hard cash around with them. Three nifty features in the free app are Bump, where iPhone users physically bump phones to “magically” transfer money from one account to the next, a Split Check calculator and the Collect Money function, which politely prompts debtors to pay up.

PayPal says its new Send Money app comes at a time when smartphone sales have leapt past 172.4 million units in 2009 (according to a Gartner study in 2010), and consumers worldwide are expected to spend US$119 billion by 2015 through their mobile phones (from an ABI Research study released in February this year).

PayPal mobile transactions have increased nearly six-fold, from US$25 million in 2008 to US$141 million in 2009.

Cool functions

With Bump, users can put two iPhones together and funds are quickly transferred between their PayPal accounts. The Split Check feature is a hassle-free way to allow users to divide and quickly reimburse each other for the cost of a meal, including a tip, for up to 20 people (great, if the wine was good and your maths isn’t).

Collect Money allows users to [politely] request money from multiple people for a joint gift, concert tickets, and more. Great for when that recalcitrant younger sibling goes missing when it’s time to pay for your parents’ anniversary present.

Using PayPal Send Money app, users can forward gifts of money on the spot for birthdays, Christmas, to charities or any other worthwhile cause.

“Today, you leave the house with three critical things: your phone, your wallet and your keys,” said Frerk-Malte Feller, managing director, PayPal Australia. “PayPal Send Money lets consumers access their wallets through their phones. Because with PayPal, the wallet lives in the cloud, the mobile phone is just one device customers can use to access it.”

The new PayPal Send Money app also incorporates a feature where users can set reminders for recurring payments and manage their PayPal accounts all from the iPhone.

There is also a currency calculator for international transactions and 15 different languages. PayPal Send Money requires a PIN or password for every transaction to help prevent unauthorized use.

The application is now available to download for free at the Apple iTunes store online or the Apple App Store from any iPhone or iPod Touch.

PayPal Send Money is also available for Android phones and Blackberries.