A small 12-person start-up in Des Moines, Iowa is creating a lot of buzz recently with their mission to kill credit cards.Dwolla lets consumers pay bills and make purchases with the cash in their bank account when shopping online, a previously credit and debit-only platform.According to Business Insider owner and founder Ben Milne started Dwolla after losing $55,000 a year in interchange fees while running his first start-up.By networking with financial institutions, Milne was able to create a platform that lets people pay for purchases through their bank account, including recurring payments.This can be good news as retailers no longer have to deal with card expiration dates or interchange fees (Dwolla bypasses the dreaded ACH system). People who get paid only get charged $0.25 (that’s right, a quarter) for every transaction, no matter how small or large.However, it’s unclear whether there are any additional bank fees, and if not, whether it will remain that way. Also, payments may not go through if consumers don’t have enough money in their bank account, causing frustration for both you and your consumers. And since you don’t own the customer’s bank info, you cannot transfer it if you are sold, which has been a major problem for membership sites using other payment alternatives, such as PayPal.
