What the Dwolla?

Everyone is talking about it, but what is it? 

Essentially Dwolla is a financial network that allows the transfer of funds directly from one bank account to another.

So how is Dwolla different from the other online payment options already available?

Dwolla's main competitive differentiation is in their pricing and business model. Other online payment processing companies, like Paypal, charge varying percentages of the amount being transfered. Dwolla charges $0.25 per transaction on all transactions over $10. Any transaction under $10 is FREE. This could greatly increase profit margins of  the many online retailers that operate on shoestring budgets, especially in a difficult economic environment.

Dwolla also differentiate themselves by being completely credit/debit card free. In fact, one of Dwolla's objectives is to eventually overtake MasterCard, Visa, and the other major credit card companies.

How can they overtake these powerful credit card companies if Dwolla doesn't issue credit cards?

The idea is that because of the low transaction cost, businesses will begin to adopt it as a preferred way of payment. Other Dwolla users who want to buy something from a vendor that accepts Dwolla will be able to pay in real time from a smartphone application. No more carrying around credit cards and worrying about leaving them somewhere, or having them get stolen. No more wasting time entering and re-entering your credit card information on websites.

So why isn't everyone using it yet?

Until very recently Dwolla could only legally operate in Iowa, where the company is based. Dwolla believes they have found a legal way to operate nationally, and has opened up registration to all 50 states.

Awesome! Where can I sign up?
https://www.dwolla.com/