I started to sign up for this to see what it was all about. It looks exactly like a credit card to me, backed by a bank. Here's the introduction to the standard terms and conditions you get with any credit card application:<p>> Prior to applying for a Dwolla Credit Account, Comenity Capital Bank requests your consent to provide you important information electronically.<p>The APR stated in my "prescreened" offer was 24.99%, which is staggering compared to my existing revolving credit accounts. There must be some subtle feature that makes this product novel, but I don't know what it is.
The post is light on details, unfortunately.<p>As far as I can tell, it's more similar to BillMeLater than it is to a credit card. The only other information I could find on Dwolla Credit is a support FAQ[1]. Interestingly, the credit provider is Comenity Capital Bank, which is also behind BillMeLater[2].<p>I still don't completely understand the difference in models between something like Dwolla Credit (or BillMeLater) and a credit card. Why do credit cards cost the merchant 2+%, while Dwolla Credit only costs 25 cents? It seems like the same risks apply.<p>[1] <a href="http://help.dwolla.com/customer/portal/articles/1330333-credit-faq" rel="nofollow">http://help.dwolla.com/customer/portal/articles/1330333-cred...</a><p>[2] <a href="https://www.billmelater.com/help/index.xhtml" rel="nofollow">https://www.billmelater.com/help/index.xhtml</a>
Related: BillMeLater Draws Federal Scrutiny<p><a href="http://www.bloomberg.com/news/2013-10-22/ebay-probed-by-regulator-over-loans-pioneered-by-payday-lenders.html" rel="nofollow">http://www.bloomberg.com/news/2013-10-22/ebay-probed-by-regu...</a><p>EBay Inc. (EBAY) is facing a probe by the Consumer Financial Protection Bureau over a loan program that mimics a structure used by high-interest lenders to evade state rules before the practice was stamped out by regulators.
The program, called Bill Me Later, is a service of the online marketplace’s PayPal unit that relies on Salt Lake City, Utah-based Comenity Capital Bank to make loans that are then purchased and managed by EBay, according to regulatory filings. Under federal law, banks can lend in any state without being licensed there, or complying with local interest rate caps.<p><and>
In 2008 EBay acquired Bill Me Later, which also lets users finance purchases in online markets run by Wal-Mart Stores Inc. (WMT), The Walt Disney Co. (DIS) and Apple Inc. (AAPL) Customers can avoid the annual 19.99 percent rate by paying off the loan before the end of a six-month promotional period. If they pay later, they incur accumulated interest and fees that effectively raise the annual rate.
When Dwolla goes international this will get interesting. Until then a lot of us just shrug. That's not intended as an insult -- I just wish they'd go global already.<p>Signed, A New Zealander.
If nobody seems to be "excited" about this new "opportunity", there is only one explanation possible: bitcoin does all of that and more and better ;-)
>We’re starting with eCommerce and then rolling out to other retailers.<p>Isn't it illegal to charge the customer before the goods are shipped. Do they handle pre-auth and settlement?
After Dwolla banned Bitcoin transactions I lost most of my interest. Bitpay and Coinbase have much better merchant programs and their fees are much lower.