Entrenched interests aside, the fact that is costs nothing worries me.
They are asking financial institutions to abandon (or at least partially switch) from the 40-year old ACH to a brand new system that has no means to support itself outside from the host financial institution, namely Dwolla. So, you're asking the banks to make the stability of Dwolla their concern. Is that really a good way to gain confidence?
If they wanted to make this a serious effort, they would have to charge some kind of membership fee, or transaction fee, just to make it an independently viable business. The fees could be as low as possible, but without them, you're left with banks relying on a "free" system. No one is going to take that risk.
I believe what they're implying is that what's free is use of the infrastructure but each transaction through the infrastructure incurs a fee. Contrast that with a CC payment gateway where you're paying $30-$40 per month in membership fees regardless of whether you even process payments for a given month.
Comments
Entrenched interests aside, the fact that is costs nothing worries me.
They are asking financial institutions to abandon (or at least partially switch) from the 40-year old ACH to a brand new system that has no means to support itself outside from the host financial institution, namely Dwolla. So, you're asking the banks to make the stability of Dwolla their concern. Is that really a good way to gain confidence?
If they wanted to make this a serious effort, they would have to charge some kind of membership fee, or transaction fee, just to make it an independently viable business. The fees could be as low as possible, but without them, you're left with banks relying on a "free" system. No one is going to take that risk.
It may cost the banks nothing, but Dwolla does charge fees.
From the site — "same price as an ACH transaction" — so a few to tens of cents per transaction.
That isn't mentioned in the linked article at all - they just say "free".
However, if you go to the actual API site: https://fisync.dwolla.com it does say the same cost as an ACH transaction.
I believe what they're implying is that what's free is use of the infrastructure but each transaction through the infrastructure incurs a fee. Contrast that with a CC payment gateway where you're paying $30-$40 per month in membership fees regardless of whether you even process payments for a given month.