Dwolla raises $5M to continue its work on “really freaky stuff” | Hacker News Reader

Dwolla raises $5M to continue its work on “really freaky stuff”

venturebeat.com

60 pointsCodhisattva24 comments

It's fun to see a startup talking about having "A good relationship with the Federal Reserve."

There is a big competitive advantage to not being in SF or NYC. They are in Des Moines, where people work on insurance, payments and risk management.

But there is no way that the credit card companies won't be trying to protect their margins and block a new payment network that avoids interchange fees.

True. VISA/MC will eventually do something to protect their hegemony, but what can they do? Lower fees to $0? I think their days are numbered (good riddance).

Buyout Dwolla?

Like RevolutionMoney? Free transfer fees I think, then sold to American Express. (Was/is Steve Case's company.)

I hope Dwolla never sells for this reason.

They'll do what any self-respecting, old-money hegemony would do: take some senators out for golf and steaks and write a big campaign check.

They will lobby to implement more regulations with regards to "money transmitters" in the hopes of increasing their costs enough that they have to raise fees.

See: http://www.quora.com/Aaron-Greenspan/Posts/In-Fifty-Days-Pay...

They won't have to try hard. There's only four states left (that don't regulate money transmitters)!

Well, first they will send regulators after them. Then they will send senators after them. Then they will send banks after them. If none of that works, they will hire mercenaries and murder every last one of them. Oh, you think that's insane? You think no one would kill over hundreds of billions of dollars? Perhaps you should read more history...

Would banks risk spoiling their relationships with Visa/MC in order to do business with Dwolla?

The largest credit union in Iowa has joined FiSync so I would think the answer is "yes".

A few months ago, when Gowolla got bought out, I thought sadly, "there goes that cool payments company." Apparently I was thinking of Dwolla.

I'm not sure whether this says something about naming your company or just about me.

I'm sure banks and credit card companies will use the entirety of their resources, both political and capital, to ensure that no organization is ever permitted to enable money to move this easily.

But, really, it should be one of the primary things that the public should be fighting for. And it will be a fight, quite possibly a literal one. We're talking about nothing less than cutting the financial throats of every banker in the world. When it comes right down to it, though, it flat out does not cost more to work with large numbers than it does to work with small numbers. The idea of the bankers or card processors getting a percentage of every transaction is fundamentally flawed and unjustifiable. Of course, this is operating on the idea that a market should be based upon people trading value for value... an idea that doesn't seem to have much footing today. If you have no value to offer, but you've got the political capital to get people forced into the playground you own, that's seen as successful business as well.

Banks aren't being disrupted. On the contrary they have an incentive to join FiSync and work with Dwolla as the current interbank systems are ancient.

The credit card companies are certainly being disrupted though. Their model is based on a limited communication capability which evaporated years ago. They will claw and hang on for dear life but it's just a matter of time.

Payment processing has been ripe for disruption for a long time - so glad they are getting around the barriers to entry.

Interesting Marc Echo is an investor - http://blog.dwolla.com/

I first met Marc at Big Omaha during his amazing talk on disruption and innovation. Marc’s advice has ranged from telling me to be more confident to telling me that our logo sucks. It’s always been incredibly unfiltered and at times… harsh. But that’s actually what we really need, and when we need the truth I know I can always look to Marc for a totally good opinion on all things in life. I can’t say I’ve ever met anyone like Marc, and his partners at Artists & Instigators just get it.

More from the CEO about all this disruption. http://blog.dwolla.com/closes-series-b-round/

Dwolla has always sounded interesting to me, but I have yet to run across any business that actually accepts Dwolla payments. I set up an account a while ago and I have yet to actually use it. The fairly high barrier to entry (giving an unknown company direct access to your bank account) also makes it hard to convince friends/family to join up.

I can only assume it's mostly private transactions so far, and they're testing merchants with physical locations to see response, etc..

My local coffee shop/bakery/coding dungeon accepts Dwolla. That's all I've seen of it, though.

That's because the majority of Dwolla's volume comes from Bitcoin-related transactions.

I'm happy to be corrected on this, but right now they have nowhere near the presence in mobile payments as the press seems to think.

I seriously doubt that there's a $1m in bit coin per month.

I could be wrong in what I think you're saying, or in what I'm reading at http://bitcoincharts.com/markets/ but according to that site, MtGoxUSD alone had $17M worth of trades in the 30 days.

I stand corrected. I made an assumption based on a bias and lack of info. (aka "never mind")

I take it and my contractees haven't had a problem with setting up. But yes, it's a higher barrier than a credit card but it's not much different an electronic check. Like Paypal, it just takes time to gain mind share.

I couldn't be happier to see a start up like Dwolla thriving in my home town. Congrats Dwolla!

Good terms with the federal reserve? Im not sure if I should feel bothered that the entity that can make tens of trillions of dollars appear out of thin air likes a certain startup.

What I see is a federal reserve that realizes green slip anonymous transactions are annoying as hell and wants to expand its power, what better way then to get some sweetheart deals to the future hub of all money transactions. Hook up these guys with big money, control the money transactions globally instead of domestically.

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