
Dwolla raises $5M to continue its work on “really freaky stuff” - Codhisattva
http://venturebeat.com/2012/02/07/dwolla-gettin-freaky/
======
bproper
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.

~~~
Codhisattva
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).

~~~
callmeed
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...](http://www.quora.com/Aaron-Greenspan/Posts/In-Fifty-Days-Payments-
Innovation-Will-Stop-In-Silicon-Valley)

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

------
billybob
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.

------
otakucode
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.

~~~
Codhisattva
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.

------
hop
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._

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

------
eridius
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.

~~~
thinkcomp
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.

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

~~~
narcissus
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.

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

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

------
maeon3
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.

