Iowa-based startup Dwolla has made a name for itself with its rather painless approach to sending money over the Internet — sending someone $US10 or less is free. Sending more than $US10 costs $US0.25. That’s all there is to it.
“What about Bitcoin?” becomes the obvious question.
The company did previously deal in the virtual currency, but the relationship ended poorly when the federal government seized $US2.9 million worth of Bitcoin from Dwolla as part of its investigation into the Mt. Gox Bitcoin exchange.
As Dwolla was merely the payments processor, the money actually belonged to Mutum Sigillum LLC, a U.S. subsidiary of Mt. Gox. This incident saw Dwolla pull the plug on its Bitcoin functionality late last year, likely due to it’s grey legal status.
Bitcoin’s only become more mainstream in the months since then, so what are Dwolla’s current feelings toward the currency? Dwolla’s Jordan Lampe elaborated via email with Business Insider:
Dwolla’s made the decision to focus its efforts on moving the US Dollar … We look forward to reevaluating Bitcoin’s status as a commodity or currency … Whereas we work inside and with the constraints, regulations, and stakeholders of the existing US payment systems, Bitcoin is tackling the problem outside … There’s a powerful potential partnership here that I’m personally really excited about. Things just need to fall into place. We hope they do.
So there’s no Bitcoin integration on the way for Dwolla for the foreseeable future. But just because Dwolla deals in old fashioned U.S. dollars doesn’t mean it can’t improve the way we interact with money. Dwolla-to-Dwolla transfers happen instantly in realtime. And you know how those old-fashioned ACH transfers from one bank account to another take can a matter of days? Lampe told us that “it’s Dwolla’s mission to reduce this time. It’s why we’re creating new payment innovations like FiSync, which hopes to replace 40-year-old ACH system with realtime [transfers].” Once a financial institution implements FiSync (it’s free!), its customers can enjoy ACH-like transfers without pesky waiting time.
Bitcoin is quick to capture people’s imagination, but far more people would rather trust the U.S. dollar. As long that’s true, there will be great utility in providing services that move it quickly and efficiently. Dwolla’s so far happy to be one of the companies doing so.