Payment System

Is Dwolla a PayPal Killer?

Dwolla logo

A few weeks ago, a client sent me an email about a new online payment system that he was interested in exploring as an alternative to PayPal. The name of the service is Dwolla, and I had never heard of it before, despite the fact that it’s based in Iowa, my home for 12 years before moving last year to paradise. At first, I was skeptical, but when I started to look into Dwolla, I found the service had some very attractive features.

Merchant Fees

The first thing that intrigued me were the low fees Dwolla charges for digital transactions. For all transactions under $10, Dwolla charges absolutely nothing. Zippo. Nada. So micropayments like buying a latte from your local barista don’t cost anyone anything. In fact, Dwolla has an app for a variety of mobile devices, such as iPhone, iPad, iTouch, Android, and Windows 7 Phone, that allows you to locate others who accept Dwolla payments.

For purchases over $10, the charge is a flat rate of 25 cents, which sure beats the percentages that PayPal and credit card companies have been charging recently. For merchants, Dwolla provides a web-based Dwolla Merchant Kiosk for processing transactions either through a computer or smart phone.