David Feldt Proud father. Entrepreneur. Builder. Catalyst. Accelerator. Guide.

Rethinking (Online) Payments In A Post-Credit Card World

In a sea of startups with non-existent or ill-defined business models and me-too ideas, here's a wonderfully simple idea that has huge revenue and profit potential.

Dwolla was founded by 28-year old Ben Milne in Des Moines, Iowa.

After paying an exhorbitant amount of fees to credit card companies, he and his team decided to rethink (online) payments and build something to bypass the credit cards companies.

He has created a disruptive payment platform linked to the existing ACH payment network that all banks use.  Dwolla has the potential to dominate e-commerce, m-commerce and s-commerce in the years to come.  Unlike Paypal and Square, which sit on top of existing credit card platforms, he enables payments between consumers and merchants without the oppressive credit card fees.

Dwolla charges 25c - yes, a quarter - on every transaction regardless of the amount of the transaction. Not your typical 2.9% of total amount sent plus $0.30 per transaction that others charge.

Ben's focus is clear: "To maximize the value of every electronic financial transaction."

Why do I like Dwolla so much? Here are 7 reasons:

1. Rethinking an industry - there have been many mobile payments solutions since PayPal but they all utilize the same credit card network, including Square. Here's a small team in Iowa who have rethought global payments and created something unique and smart.
2. It's about revenue, transactions and money - this startup is focused on making money from the get-go. It's not just another trendy social media photo sharing app with no business model. Its focus is to maximize the value of each financial transaction that's made online. It takes a tiny transaction fee and allows its customers (merchants and consumers) to keep more of their money. Simple. Powerful.
3. Serial entrepreneur who has had financial success - Mr Milne is only 28 and has had proven success before.
4. Multi-sided platform with API and tools to allow explosive network growth - Dwolla is a multi-sided platform and it provides a seamless API which allows developers and third-party companies to build an extensive ecosystem with great ease.
5. Smart investor choice - Dwolla chose a major financial services company as its investor and has leveraged the connections, knowledge and footprint of this investor to test and grow its platform.
6. Smart distribution strategy - Dwolla doesn't just rely on the typical social network effect to sell itself.  It is selling itself as a financial product via its financial services investor network
7. Exceptional user experience - Easy, well-designed user experience ensures adoption.