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Are you as uninformed as I about the amount of money siphoned off by banks from the public through charges to merchants which forces prices higher for the customer. The amount that the banks siphon off through these charges is a staggering $46 Billion per year. Before you read any further, take a few moments and think about how much money that is PER YEAR that the banks in effect charge you to access YOUR money!

Now consider that banks like PayPal have such restrictions through their 'Terms of Service' that it makes it very difficult for some merchants. PayPal is not the only bank that does these things, but they seem to be overly aggressive in their policymaking. So let's use them as an example to illustrate a few points.

Paypal has stated many times that for a merchant to protect themselves from charge backs, the merchant has to wait for 180 days before sending the goods. How many customers are going to sit still with a business holding onto their merchandise for 6 months before shipping it? NONE!

Paypal can and does seize money from merchants when they decide to. This is usually the result of internal book keeping problems of confusing one merchant with another. It has been stated by investigative reporters that Paypal is holding billions of dollars that rightfully belongs to merchants and they use these monies for any purpose without paying interest or damages from their actions.

There is a new payment processor, Dwolla and they are literally changing the way people access and use their money. They are doing this without all the typical bank charges.

Before we get into discussing the way it works, let us look at who and what Dwolla is. Dwolla, firstly stands for 'Web Dollar'. Dwolla is partnered with several companies including the Veridian Credit Union of Iowa. Veridian is the actual 'bank' for all the transactions. There are some well know and respected other partners that handle the secure book keeping of the transactions.

How it works;

You sign up at Dwolla for an account, either personal or business. Currently you must use Internet Explorer to sign up and complete the application. You can use either a checking or a savings account at Dwolla, and they verify your account by placing small deposits in it, which you must enter into a secure form on their site.

When you make a purchase from a merchant, typically the merchant pays a transaction charge, and a percentage of the total transaction. These fees range from about 3% of the transaction to 5 or 6%. The same transaction at Dwolla can be FREE. Or it could cost as much as $0.25 (twenty five cents). This all depends on the transaction amount. Everything under $10.00 is FREE. Everything over $10.00 is $0.25.

The transaction procedures are identical, but the costs are significantly different. Let us look at two different transactions. First a micro payment of $1.00;

At Dwolla this is free and at PayPal this would have transaction charge of $0.39 plus a 3% fee of $0.03 for total fees of $0.42. The net amount to the business or to a charity, etc from Dwolla would be $1.00, from Paypal it would be $0.58 or a 42% charge.

Now let us look at a $700.00 purchase; at Dwolla it would cost $0.25, at PayPal this would have a transaction charge of $0.39 plus a 3% fee of $21.00 for total fees of $21.39.

The question here is 'Why does Paypal and other banks need all this money?' There are no 'credit cards' at Dwolla, merely bank_account-to-bank_account transfers of money. The statement could be made that Paypal accepts 'debit cards' and that is true, but they do not pass these savings to the merchant, they still take the fees as if it was a credit card. It could be stated that Paypal needs these fees to protect themselves from credit card fraud, but they pass all this to the merchant through charge backs. So again, 'Why does Paypal and other banks need all this money?'

By The Way, we now accept Dwolla for payments and checkout. We have to have it integrated with our shopping cart, but until then just contact us and we will make it an easy smooth transaction.

Copyright ? 2012 JD Durham