When someone considers online payment, they consider using PayPal to safely purchase something. But now a new serious competitor has entered this market, which has significant barriers to entry. Patrick Pascal’s blog post states that Dwolla is in the market and is capable of competing with PayPal.

In Iowa, a man named Ben Milne started Dwolla under serious legal constrictions. What enabled his company to become successful in the market is the different transaction cost system. This was the key distinct feature that allowed Dwolla to strive. Dwolla has the potential to become a direct substitute to PayPal.

PayPal's fees compared to Dwolla's fees. The Dwolla fees are significantly lower compared to PayPal's.