This 28-year-old's Iowa startup moves $350 million a year.

Great quote: "In my own naive way, I would never build a company anywhere but Iowa so maybe I just don't know any better. My personal feeling is, if you want to build it, where you are is just an excuse. Figure out what the area has to offer you and then leverage that. Hustle your ass off and make it work."

Surely the problem at hand is not simply an atomic transaction in a distributed system, any HN reader worth her salt can do that.<p>The problem is satisfactorily handling money laundering, fraudulent transactions, and a myriad other user-facing issues. A better question is what regulation should exist in this space, and the actual mechanics of the payment.<p>Who gets to say the buyer's money is good, and that the seller has adequately dealt with the conditions of sale?

I have strong feeling that majority of money flow comes from Bitcoin-related services. Would be interesting to see real numbers.

This solves a problem of exuberant costs for large payments, but my main problem is the reverse: small payments, transactions of a few dollars each. $0.25 cents for a transfer of just a few dollars is way too high.

Wait. What?<p>In Australia, we have "EFT" - electronic funds transfer (between banks). Typically, there's no cost and it's accepted between all banks. If you have to transfer to another bank though, it <i>can</i> take one business day.<p>We also have BPay, which is simpler and a little easier.<p>The USA seriously doesn't have these?

My creating a dwolla account is a direct result of my interest in Bitcoin exchanges. I wonder how many of their users have a dwolla account for this purpose.?

If the average transaction is $500 and they move $350MM a year, that's only $175,000 in revenue. I know they are still a young startup but that's certainly a less sexy number than the headline tries to imply.<p>Am I missing something?

If they succeed, it will mean the financial transaction space is truly becoming efficient. At $.25/transaction and an average transaction size of $500, that means a charge of %0.05 or 5bps. Compare that to most credit card companies that charge 2% plus a fixed transaction fee.<p>That also means their current run rate is $175,000/year which is not a huge business.

That's awesome that Dwolla is moving 350 million a year, but I wonder how many total transactions that sums up to. Since they're charging per transaction, showing a net transfer amount doesn't really give any ideas about total revenue or if they are profitable yet.<p>It's an interesting price model for sure, but I'm surprised they just didn't do the typical "under-cut everyone else" strategy. It would be hard for me to stomach seeing $1 million transfer through my system and only 25 cents getting deposited in the company bank account. I mean that's a %0.000025 cut, and since this service is so convenient, I imagine they could charge more.<p>Remember, things aren't priced at what they are worth but what people will pay for them. Even a 0.5% cut gives you 5k on a million dollar transaction, and that's still tons better than paypal.

Dwolla is one of many companies violating money transmitter laws. Having a bank processor as an investor does not make one exempt, nor is such an excuse consistent with the fact that Dwolla had to register as a money transmitter in Iowa.<p>Our formal complaint to the DFI is below.<p><a href="https://www.facecash.com/legal/20111102.dwollapacket.pdf" rel="nofollow">https://www.facecash.com/legal/20111102.dwollapacket.pdf</a><p>As I've made clear in the past (<a href="http://www.aarongreenspan.com/writing/brown.html" rel="nofollow">http://www.aarongreenspan.com/writing/brown.html</a>), I'm not at all a fan of the laws, but if I have to obey them, so should everyone else.