Your post made me do two double-takes.
1) People buy $30k rings!? 2) People put $30k on a credit card!?
1) People buy $30k rings!? 2) People put $30k on a credit card!?
At that level you are not using the card for credit, but rather as a replacement for cash. And who wants to write a check when you can use a credit card instead?
It's faster and safer to use a credit card, plus the merchant doesn't have to worry that the check will actually clear.
And using a debit card when you have a lot of money in your account is not safe. So credit card wins.
And for that same reason dwolla will stay rare for such transactions - without the consumer protection laws that credit cards have people will just not use it with strangers.
It will be used exactly as the article describes: To send money between people who already have a relationship, but it will rarely be used for purchases.
Basically he's replacing checks, not credit cards.
Meanwhile, in large part of the developed world, banks do direct transfers nationwide and checks are dying rapidly. I'm 36 and Norwegian. Before I moved to the UK, the last time I'd seen a check in person was when I was 5-6 years old, and I'd never had a checking account as they're no longer offered as standard in Norway.
While checks are still more common in the UK, they are being phased out, and direct account to account transfers are now down to about 2-5 hours during the business day.
Dwolla faces a massive risk that the big banks will just wipe out their value proposition overnight by deciding to copy the European model.
Or the school wants the kids to send in a fee to cover some trip they are going on? How do you do it without a check?
1). You remember to take cash and if you forget, you always have your cards on you and an atm is usually no more than a few minutes away. You can also increasingly pay for these sorts of things via mobile phone.
2). The school sends their bank account details along with the trip information and I setup a same day wire transer online.