But wait, don't banks charge transfer fees, too? How can Dwolla afford to keep its transaction fees at a flat rate of $0.25?
"What Dwolla does is take advantage of is the current structure of how money moves and makes a new one," Dwolla spokesperson Jordan Lampe tells Mashable. "We remove three or four parties [from the payment process]. By default we're not only making it cheaper, but making it safer."
Dwolla argues that by taking away the exchange of your 16-digit credit card number or other financial information, it's removing much of the potential for fraud inherent in other payment methods. It sees itself as cash for the Internet.
At the same time, however, the startup asks users to trust it with sensitive information such as their social security number and banking info.
It might take more than a convenient buy button and a recently announced investment from Ashton Kutcher to make the majority of consumers comfortable with that level of information exchange. So far Dwolla has signed on about 100,000 of them. In June 2011, the startup said it was processing $1 million per day.
"I think it’s just going to take some education," Lampe says about wooing consumers to use Dwolla over a credit card. "We are dealing with a 50-year-old behavior."