Say Bye to Paypal and Welcome Dwolla
Nov 18th, 2011 by adrianlai
This blog post takes a look at the up and coming online payment company called Dwolla. In an industry dominated by Paypal, Dwolla has managed to make a name for itself and is currently moving close to $50 million a month. What appeals to a lot of users of Dwolla is the fix charge of 25 cents per transaction as opposed to the percentage per transaction Paypal charges.
The blog provides an interesting analysis on how Dwolla can grow to such a scale in such a short period of time. Its ease of use certainly plays a huge role, and the incorporation of the ever popular social media definitely helps fuel its growth. The fix 25 cents change per transaction would also be popular with clients who have large online transactions. In addition to these two reasons, I believe there is another important factor to contributes to its growth. With Dwolla, payments are made directly from clients’ bank accounts. This differs from Paypal, which makes transactions through debit or credit cards. And because they don’t exist in the system, fees don’t have to be brought into the system. It is because of this fundamental difference that Dwolla is able to keep transaction cost low.