In particular, the new Guest Checkout, which lets a consumer pay online with Dwolla, even without having a Dwolla account, is part of Dwolla's quest to create what the "ideal transaction." As Lampe puts it, Dwolla realized "we were our own paint point." Whether a consumer uses a credit card or a mobile or online payment application, there's still this notion of belonging to a membership club. Dwolla wants consumers to have the choice of not being in the club.
The new Dwolla Price feature is a way to reinforce the savings of using a new payments network that doesn't have multiple hands out, grabbing fractions of hard-earned dollars.
So far Dwolla has found more success in niche applications, like small businesses paying each other for ad-hoc needs or making wire transfers. It has also found success through partnerships, like with mFoundry, a mobile service provider with more than 800 bank clients who use (and provide customers) services like mobile deposit, loyalty programs and mobile bill pay ... and now a secure online payment network with lower fees and instant clearance (read: Dwolla).
Milne claims that Dwolla is more secure because it doesn't involve exchanging a relatively identifiable 16-digit number and expiration date. No personal or account data changes hands during a transaction. The user just has to be logged into the app, where they can select the merchant, and then pay. Simple. (Person to person payments can even be initiated using social applications like Facebook.)
There are merchants in all 50 states, Milne says, and those merchants are exposed to the Dwolla app (and thus, the consumer) using location. Dwolla transactions over $10 cost the merchant a 25-cent fee (PayPal's published, non-discounted merchant rate is 2.9% plus a 30-cent transaction fee)
Dwolla's aspirations don't stop there. The company has created FiSync, which provides real-time transfers for financial institutions. In other words, Dwolla aims to replace the automated clearing house (ACH), a 40-year-old network Dwolla claims is also riddled with fraud and inefficiency.
Milne admits that Dwolla has a long way to go. FiSync launched with a single, Iowa-based credit union. But Milne also says the market (defined as the money moving through ACH) is $34 trillion annually.
The man thinks big.
Fritz Nelson is the editorial director for InformationWeek and the Executive Producer of TechWebTV. Fritz writes about startups and established companies alike, but likes to exploit multiple forms of media into his writing.
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