With the addition of LinkedIn support, Dwolla users can now send funds to a Dwolla ID, Facebook friend, twitter user, LinkedIn contact, via SMS text message, email, or by using Dwolla’s proximity based payments tool, Proxi. The firm also has mobile apps for iPhone and Android devices. There is no cost to send funds and a 25 cent charge for receiving any size transaction.
Acceptance will likely prove to be Dwolla’s largest obstacle, even with multiple payment options. The process of looking up a user and submitting the payment at the point of sale is likely to be more cumbersome than simply swiping a payment card. For the merchant, the 25 cent flat fee is a haircut from credit interchange rates, but consumers who value reward points are unlikely to give up their points earning plastic. While Dwolla may be more successful converting debit card users, the acceptance costs could prove more costly compared to small ticket debit transactions. NFC enabled mobile wallets offer a stronger value proposition and efforts in that direction will be more lucrative.