This 28-Year-Old's Startup Is Moving $350 Million And Wants To Completely Kill Credit Cards

This 28-Year-Old's Startup Is Moving $350 Million And Wants To Completely Kill Credit Cards

Dwolla is the brainchild of Ben Milne and his company is threatening credit cards,

BI: We hear you're making credit card companies angry. How are you doing that?

Ben Milne: Ultimately we're trying to build the next Visa, not the next PayPal.


Read more: www.businessinsider.com...

Why the anymocity?

it's on track to move more than $350 million in the next year.

Unlike PayPal, Dwolla doesn't take a percentage of the transaction. It only asks for $0.25 whether it's moving $1 or $1,000.


Read more: www.businessinsider.com...

This could really take a huge percentage of market away from the banks and their cards of Satin.

I will have to anticipate using this service for future online transaction.

Frankly, And for the record, I have ceased taking plastic for about 6 months now as I no longer support the usury associated with credit cards, their high fees, charges and funky clauses that allow rates over four times contracted percentage charges, swipe fees, manually entering fees, monthly charge, batch fees, higher fees for some commercial and rewards cards, 3rd party service costs to electronically send the information, volume fees, extra charges to accept American Express, Discover, plus cost of terminal, receipt paper, code and electronic signature pad expense for debit and signing, etc..

It has cost me business, most likely more than the charges warrant regarding income, but if we all took this stand, there would be no more preying upon all who use and accept these, (however convenient, -please leave the easy way out and man-up if you want to see change), cards from hell.

I wish Dwolla infinite success and hope we can all do what it takes to break free from this costly monopoly.

So...with Dwolla ...they have direct access to your bank accounts.....to move money out and around with a charge of .25 cents per transaction...interesting.

I personally have no credit cards....I don't like the finance charges.

Sometimes...I think that TPTB....may want to do away with (cash-money) completely.

reply to post by caladonea


You think? The rockafellers have been openly saying that for decades.

On a side note, the same should be done with insurance. If one person started a company that would give back even 50% of your premiums after each year if you didn't use it they would either bankrupt or change the entire industry. Let alone if they gave 90-100% back and they would still be making money.

reply to post by imd12c4funn

The problem is I would bet if they become popular and everyone jumps on, they will raise and raise that fee until they are just like the rest.
We have no choice but to take credit cards because tourists do not carry a bunch of cash :-(

reply to post by caladonea


Yeah I feel the same way.
It is almost as if if you don't use their expensive cards, it is suspicious. Or in the case of the California Municipality mandating paying utilities and such with plastic bercause they won't accept cash, the currency that, although worthless against any exchange for gold or silver, is still -and it states so on each note- "legal tender for all debts public and private".

Where do these dictatorial usurpers come from? Ultimately, the same fabric that creates all existence.
Yet, somehow I find it hard to feel as if those who wish to be masters and financial vampires are part of me at the potential / fabric existence level. Shame on that part of me...

Here is where someone involved in "money" does not even understand money - fiat currency and the transactions involved.

They have created a Debit card, one that takes the "money" or debt notes directly out of the bank account. It works like a cash transaction and for facilitating the transaction they get a cut, just like paypal - only less of a cut.

A CC is a "check" and not a debit from the account. As such, the transaction requires a signature to CREATE the money used in the transaction. Even wonder why a debit transaction is nearly impossible to reverse but a CC transaction simply requires a keystroke? The latter is not a transaction until the signature is verified and then the money is CREATED out of thin air. If there is an issue with the transaction, the money is simply un-created and the whole deal is off.

What they are doing is not in competition with the CC industry but in competition with CASH.

I would really get excited if someone came up with a true Ebay killer

You want to talk about some ridiculously exorbitant fees. - total dink & dunk - 9-12% of the final sales price and that's not even including the listing fees

Completely oppressive to sellers - and then they run the money through their PayPal system and get another 3% plus...on the total amount

Hopefully we keep seeing these work-arounds

Maybe one day the whole financial system will realize that they no longer have a monopoly and actually need us more than we need them.

Should be interesting to follow as it develops... one potential problem I don't addressed is how will they handle fraud - that can make or break them. (Remember eGold?)

He's saying he can hold money in a Dwolla account too, which is straying into banking territory, and like PayPal they'll have to apply and be approved for a banking charter/license, and comply with banking regulations which AFAIK they're not doing now. What happens when the government demands specific information on one of their account depositors/holders and Dwolla can't comply? (Remember eGold? Early PayPal?)

Credit cards also extend credit. Is he planning to extend credit? If not then he is not a credit card nor a credit card replacement. Will he be established in point-of-sale locations to allow merchants to accept Dwolla instead of credit cards? So far, it appears Dwolla is only an alternative to a service like PayPal - except they charge a flat fee instead of a percentage.

Should be interesting to watch develop, but he's not anywhere close to killing off credit cards. I can foresee a few acts of fraud can easily send Dwolla to the trash-heap of promising start-ups and alternate payment systems. (Remember eGold?)

reply to post by caladonea


Yep TPTB don't want cash. Have a look at Kissangers visit to New Zealand years ago to try and set it up. New Zealand was a guinea pig with the EFTPOS.

I love my discover cc. I save so much money by using it and have always found the help very pleasant to deal with. I just bought 134 dollars worth of rewards bucks last night for Christmas xbo360 games for the kids.

Edit to say they would have to have some pretty good incentives to get people to switch. I have 0% interest and get extra at checkouts for using the card.

Originally posted by ludshed
reply to post by caladonea

 

You think? The rockafellers have been openly saying that for decades.

On a side note, the same should be done with insurance. If one person started a company that would give back even 50% of your premiums after each year if you didn't use it they would either bankrupt or change the entire industry. Let alone if they gave 90-100% back and they would still be making money.

There is one non profit and or not for profit insurance company, USAA, but it
only or active or former military.

It costs about 50% less than the next cheapest insurance out there.

For years I have said this needs to be the model for health insurance,
car insurance, home insurance, etc etc...

reply to post by crankyoldman

True. You need money to spend it with debit. But this does allow you to shop online and move money around at low cost, generally. Although for smaller purchases maybe it's not so good.

Originally posted by Char-Lee
reply to post by imd12c4funn

 

The problem is I would bet if they become popular and everyone jumps on, they will raise and raise that fee until they are just like the rest.
We have no choice but to take credit cards because tourists do not carry a bunch of cash :-(

Yet, if these cards were not accepted, we would all carry cash, or another form of barter, such as saturnbarter.com...

The hard part is to acknowledge the addiction to plastic and then do something to change the system. Eliminate complacency and devise alternative ways to trade with others. That is the key to freedom without the constant burden of charges for every step from cradle to grave which feeds their strength and allow them to research and develope ever-more ways to suck the last penny from each of us. If it were legal, and at this rate it someday would be, they could come and force you to pull you pocket linings out to insure you are not hiding even a penny, (which used to be copper). And I recall reading that it cost more than the face value of this coin to produce it. What is wrong with that picture?

reply to post by Ex_MislTech

For-profit encourages innovation. If you make something like this non-profit then you're cutting off your arm to give your left leg some extra jump. I'd be a lot more cautious with my thinking.

Just because insurance is vital for all people doesn't mean it cannot/shouldn't be innovated.

There's innovation and then there's greed and caprice. You check greed, but don't destroy it.

Originally posted by antar
I love my discover cc. I save so much money by using it and have always found the help very pleasant to deal with. I just bought 134 dollars worth of rewards bucks last night for Christmas xbo360 games for the kids.

Edit to say they would have to have some pretty good incentives to get people to switch. I have 0% interest and get extra at checkouts for using the card.

edit on 13-11-2011 by antar because: (no reason given)

It only seems like your getting a good deal because the cost of the card is passed on to the business
leading to pressure on the business to raise their rates.

This is why some gas stations have started to have two different prices for cash or credit.

So some of the price inflation pressure on the system is coming via the cards.

Originally posted by jonnywhite
reply to post by Ex_MislTech

 

For-profit encourages innovation. If you make something like this non-profit then you're cutting off your arm to give your left leg some extra jump. I'd be a lot more cautious with my thinking.

Innovation in protection rackets...you work for the mob ???

Insurance is just a protection racket.

Farmers have had co-ops for many years, I have not seen you out there picketing them.

reply to post by Ex_MislTech

There's insurance business and then there's protection racket.

There's innovation and then there's greed or caprice.

Don't cut every cake with the same knife. It's cumbersome.

People can overdo it. They can lose sight of the goal. It happens.

You're basically asking for something to be free when that's not really possible.

Even resellers can perform a useful service. But they can also game the system and harm.

reply to post by Ex_MislTech


Couldn't agree more

Insurance does the same thing the mob did 50 years ago "offering protection" in order for a cut...

Just got rid of the ball bats, found some suits and lobbyists, standardized ratings and...ta-dah!! now they're legit.

Originally posted by antar
I love my discover cc. I save so much money by using it and have always found the help very pleasant to deal with. I just bought 134 dollars worth of rewards bucks last night for Christmas xbo360 games for the kids.

Edit to say they would have to have some pretty good incentives to get people to switch. I have 0% interest and get extra at checkouts for using the card.

edit on 13-11-2011 by antar because: (no reason given)

If the dollar was valued as prescribed, those 134 reward bucks would be about 14 bucks and all the money you spent to get those 134 reward bucks would also have value rather than the devalued fiat currency we are printing into hyperinflation. That would make the 134 so insignificant, it would buy you 10 fold the games and possibly the xBox as well.
So are you really saving? or just getting what amounts to about 14 real value dollars for your devalued plastic consumation

reply to post by coldkidc

It takes time to organize your own savings account and considerable discipline. You may never have an accident or even need it for an emergency or for a health problem, but it could happen. Some people aren't good at controlling their impulses and may spend the money. Or they may not realize how much is needed. It's a responsibility to do a savings account and some people find it easier just to sign up with an insurance company and have them take care of the details. Of course, there's always a risk when you let someone else take care of it.

I don't work in the insurance business. But I'm sure someone who does could explain it a lot better than me. You're just here with a chip on your shoulder it looks like.

I can somewhat understand you since insurance is for SOMETHING THAT MIGHT HAPPEN. War isn't much different, especially pre-emptive war. If a man wanders into a store with a gun and is carelessly aiming it at people then you must assume he plans to shoot someone. You call the police or run for your life. If you approach a police officer and aim a cap gun at him, he'll probably shoot you. All of these are examples of acting to prevent something that might happen.

And htis is off topic.

We're discussing something that is like cash or a debit card and can be used online. Is cheap.