How does PayPal differ from Dwolla?
Payments
Asked by Question Bot04/Feb/20121 answer
1 Answer
F
Faisal Khan
Answered 04/Feb/2012
PayPal - Person to to person (and business to business) payment system. Predominantly payments are transacted over email. Paypal links to a card association network (Visa, Mastercard, Amex), and to ACH network. They have transaction fees for every transaction that hovers around 1.9% to 2.9% range, plus a very small charge for the transaction itself. As Sean Parker (business person) rightly pointed out, over the year, that transaction fees add up. PayPal has native integration with Ebay and very many websites use PayPal "Pay by PayPal" buttons or integrate the credit card acceptance program of PayPal (which incidentally is restricted to countries in which PayPal operates in).
Perhaps the biggest thorn with Paypal is their unilateral customer service and decision to block your funds, suspend your account or reverse transactions, and you will have a situation that is nothing short of a nightmare to have it resolved.
Paypal has a 100 Million active users worldwide. So it is readily accepted by a lot of people/businesses. Paypal operates worldwide (barring a few countries).
Dwolla - As they cite on their website, they are the 'cash' equivalent of the online world. Dwolla's biggest advantage to date is the pricing model that they are structured on, irrespective of the transaction amount, Dwolla charges 25 cents per transaction, for small value transactions that are under $ 10, the transaction charges are zero.
Dwolla currently only operates in the US.
Dwolla's aim and focus is to by-pass the traditional payment networks (and card networks) thus by-passing the hefty fees levied, a sore point with millions of customers. Dwolla's backend is presumably (albeit I am not privy to it) is based on ACH (automated clearing house) principals, where bank to bank transfers are done via the ACH. {again I want to stress this is an assumption on my part that they are using ACH}.
Between Paypal and Dwolla, Paypal is the proverbial 800lbs Gorilla, and Dwolla the new entrant. Granted people are more accustomed to Paypal versus Dwolla???? However it would not be fair to pitch a startup against a 10+ year old company. Not yet at least. Dwolla's rapid rise and adaption is however quick and given a few years, I would not be surprised it Dwolla would be a payment powerhouse.
Perhaps the biggest thorn with Paypal is their unilateral customer service and decision to block your funds, suspend your account or reverse transactions, and you will have a situation that is nothing short of a nightmare to have it resolved.
Paypal has a 100 Million active users worldwide. So it is readily accepted by a lot of people/businesses. Paypal operates worldwide (barring a few countries).
Dwolla - As they cite on their website, they are the 'cash' equivalent of the online world. Dwolla's biggest advantage to date is the pricing model that they are structured on, irrespective of the transaction amount, Dwolla charges 25 cents per transaction, for small value transactions that are under $ 10, the transaction charges are zero.
Dwolla currently only operates in the US.
Dwolla's aim and focus is to by-pass the traditional payment networks (and card networks) thus by-passing the hefty fees levied, a sore point with millions of customers. Dwolla's backend is presumably (albeit I am not privy to it) is based on ACH (automated clearing house) principals, where bank to bank transfers are done via the ACH. {again I want to stress this is an assumption on my part that they are using ACH}.
Between Paypal and Dwolla, Paypal is the proverbial 800lbs Gorilla, and Dwolla the new entrant. Granted people are more accustomed to Paypal versus Dwolla???? However it would not be fair to pitch a startup against a 10+ year old company. Not yet at least. Dwolla's rapid rise and adaption is however quick and given a few years, I would not be surprised it Dwolla would be a payment powerhouse.