An Iowa man has created a new on-line payment system to compete with services like PayPal. Ben Milne says the idea came from a previous business where they sold speakers on-line and had to pay on-line transfer fees. He says they started looking at ways to move money electronically without paying the interchange fee, and couldn’t find one, so they decided to create one.
After two years of they came up with a system called DWOLLA, which is a way to move money without paying what’s called the “swipe fee” or interchange fee. Milne says current systems charge a transaction fee of two to five percent. Milne says DWOLLA unables them to provide the service while charging just a quarter.
Milne says they built their own payment network, so when money moves through their system, the money never goes through the large systems that charge a fee. Milne, who is originally from Cedar Falls, says his Des Moines based company is starting with a focus on his home state.
He says they launched in Iowa one year ago and have a few hundred businesses on board. Milne says they have started the service offering it in California, but they are focusing on building the business in Iowa for right now. Milne says the bigger competitors have had a positive attitude about his company.
“We’re not really a direct competitor to a lot of the big guys, we’re kind of more of a supplement,” Milne says. He says they don’t do things exactly the same way and don’t cater to the same client base as the bigger companies. Milne says they cater to those businesses that rely heavily on credit and debit card use, while his system doesn’t use them at all. He says they are competitors in that they both move money, but they don’t compete in the way they move the money.
Milne says DWOLLA can be used by individuals and businesses, and you can find out more on-line at DWOLLA.com.