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Payment startup Dwolla wants you to be able to buy things from web pages as easily as you can tweet and "Like" from them. The company has introduced a customizable "buy button" that installs a specific one-click purchase request on websites.
On the surface, the new button works like a more specific PayPal button. Developers might customize it to say "Buy Your Little League Uniform" or "Pay Rent" or "Contribute to Johny's College Fund" in contrast to PayPal's "Add to Cart," "Subscribe" and "Donate" buttons.
I, for instance, could use another cup of coffee. So I made this button:
When you click it, you will be taken to a Dwolla checkout page with a description of my cup of coffee, the price (in this journalistically ethical situation, $0.00) and any additional fees pre-populated. You're required to sign up for Dwolla before you can complete the purchase, which makes the button a handy user-acquisition tool in addition to a convenient widget.
Dwolla may look like PayPal, but it works a bit differently. Whereas PayPal charges a percentage of each purchase to complete transactions, Dwolla transactions under $10 are free. All transactions for higher amounts cost 25 cents. And while PayPal allows users to connect their credit and debit cards in order to make payments, Dwolla connects directly to users' bank accounts.
But wait, don't banks charge transfer fees, too? How can Dwolla afford to keep its transaction fees at a flat rate of $0.25?
"What Dwolla does is take advantage of is the current structure of how money moves and makes a new one," Dwolla spokesperson Jordan Lampe tells Mashable. "We remove three or four parties [from the payment process]. By default we're not only making it cheaper, but making it safer."
Dwolla argues that by taking away the exchange of your 16-digit credit card number or other financial information, it's removing much of the potential for fraud inherent in other payment methods. It sees itself as cash for the Internet.
At the same time, however, the startup asks users to trust it with sensitive information such as their social security number and banking info.
It might take more than a convenient buy button and a recently announced investment from Ashton Kutcher to make the majority of consumers comfortable with that level of information exchange. So far Dwolla has signed on about 100,000 of them. In June 2011, the startup said it was processing $1 million per day.
"I think it's just going to take some education," Lampe says about wooing consumers to use Dwolla over a credit card. "We are dealing with a 50-year-old behavior."
Image courtesy of Istockphoto, pearleye