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Dwolla might be a game changer for how people should make their transactions online. According to Dwolla, it wants to replace credit card payment system. Dwolla sees that paying few percentage here and there to credit card companies when a transaction occurs online is quite ridiculous. Instead, Dwolla suggests people should feel making a transaction online as close as paying cash for something in stores. So, Dwolla will not charge users with percentage of transaction fee and so on, but Dwolla will only take a flat fee as in $0.25 (i.e., a quarter) for each transaction. It doesn’t matter if a transaction is $1 or $1000 or $100,000, Dwolla will still take $0.25 for each transaction.
Dwolla is going to be a good idea/deal for businesses to accept transactions online. It’s obvious, because businesses can save tons of money for gazillion transactions that they do with their customers through Dwolla and not have to pay a cent to credit card companies. This way, businesses will not have to gauge how much money they have lost to credit card companies as each transaction can be quite different in the total amount of dollars. It will also be simpler and easier for businesses to calculate the exact amount they have paid to Dwolla since the fee is in a form of flat fee.
Regular users might make smaller amount of dollars for each transaction, therefore they might pay more for certain transactions when they use Dwolla. Nonetheless, when adding up the total number of transactions, the $0.25 flat fee of Dwolla will turn out to be cheaper than any credit card company, I think. Just take this one example — if I’m not wrong, Paypal charges 2.9% fee for each transaction plus a transaction fee — we ignore the transaction fee — and so it turns out that users will see Paypal cheaper only when they make a transaction in the amount of $8.62. Users will have to pay .00002 of a cent more if they use Paypal over Dwolla when a transaction in the amount of $8.63 occurs. Oh, if we had counted Paypal’s transaction fee, then each transaction of $8.62 that goes through Paypal would be more expensive than Dwolla. In the end, even with small transactions — as long Dwolla isn’t going to change the $0.25 flat fee for each transaction — Dwolla will make more sense than any credit card company out there. (Hopefully my math is correct.)
Obviously, I do not know how reliable and trustworthy and secure will Dwolla be, because it’s a new service. Nonetheless, I’ve giving it a try by signing up with Dwolla! I won’t know how great of an experience I’ll have with Dwolla since I hadn’t yet made a single transaction! Hopefully, it will be a great experience when I do make a transaction through Dwolla. You should do more research on Dwolla before creating an account with Dwolla, because I don’t want to be responsible for your bad experience with Dwolla.
For your information, users can connect to Dwolla accounts with Facebook. Does this mean users will be able to send money to each other easily within Facebook by using Dwolla? I’m not sure on this, but this could be a possibility! You know?
Related articles
- Dwolla, The Dollar That Keeps Its Value (forbes.com)
- This 28-year-old’s Iowa startup moves $350 million a year. (businessinsider.com)
- This 28-year-old’s startup is moving $350 million and wants to completely kill credit cards (boingboing.net)
- Mobile money at a tipping point? (fromconcept2market.wordpress.com)
- The Mobile Payments Capital of the U.S: Des Moines, Iowa? (readwriteweb.com)
- Top Four PayPal Alternatives For Payments (linearfix.wordpress.com)
- 08/30/11: Hostpoint, Kofax, Dwolla (sociallypay.wordpress.com)
- Social payments system Dwolla surpasses $1mm per day in transactions (thenextweb.com)
- Square what? Dwolla shows the power of cash networks (gigaom.com)
- Making Cash an Option for Digital & Mobile Payments, Dwolla Launches “Grid” (readwriteweb.com)
Vinh Nguyen
