I ran across this today: Revolution Money Exchange (RME). It is similar to Paypal; you can transfer money to friends but there are no fees. They are positioning themselves for use on social networks, but I have noticed that some Etsy sellers are using it.
Here is the institution which holds the accounts: Account issued by First Bank & Trust, Brookings, SD, Member FDIC and part of the Fishback Financial Corporation.
Maybe this is old news, but I had not heard of it until now. Being one to follow the herd (ha!), I signed up
Here is their direct link: http://www.revolutionmoneyexchange.com
What do you think? Will they give Paypal a run for their money?