Dwolla: A Comprehensive Review


Several months ago a friend brought to my attention that PayPal’s policy changes included keeping 3% of everything deposited to my account — not just from my eBook sales. As a freelance writer, I’m paid from some publications via PayPal.com; so this was disconcerting news. PayPal was playing with my paycheck and I didn’t like it.

Let’s suppose I make $1,000 a month on my freelance writing (hypothetically speaking). Three percent of $1,000 is $30. With this policy change, PayPal was making $30 per month (or $360 per year) off my income. My brick and mortal bank only charges $7.00 per month for my checking account and they waive that fee because I keep a minimum balance.

Some quick mental gymnastics had me comparing the two. With my brick and mortar bank I get a friendly face to talk to should I decide to drive to town, checks, a debit card, online banking, phone banking, a pen when I don’t have one in my purse, a change machine, a dish full of candy, and a fridge stocked with Cokes or a free cup of coffee. With PayPal, I get a way to shuffle money online, cart buttons, and a debit card. When I realized what PayPal was costing me, I felt cheated.

The friend that enlightened me to my plight was also good enough to tell me about Dwolla.com. Dwolla is another way to shuffle money online. Thing is, that is all they do. No debit cards, no frills. However, they don’t charge 3%. So I opened a Dwolla account.

Comparing PayPal and Dwolla is like comparing Goliath with David. But here it goes:

Why You Will Like Dwolla

Opening a Dwolla account is super easy. All you do is and give them your email address and a password and you’re in. Of course, they are going to ask you to verify your account and give them some other personally identifiable information, but these days, who doesn’t?

Dwolla Signup

Dwolla does not keep a percentage of your money. Dwolla charges 25 cents per transaction over $10. That’s it. No hidden fees or percentages to figure out. When I get paid from a blog I write for, Dwolla keeps 25 cents — that’s it. If I want to send my friend $20 for her birthday, Dwolla takes 25 cents — that’s it. Only one fee is charged. It just happens that the receiver of the money pays it, unless the sender opts to.

Dwolla does not charge to transfer money to your bank account. If I receive money in my Dwolla account and want to transfer it to my checking account at the brick and mortar, I do not have to pay anything to transfer it. This process only takes about two or three days.

You can send money using Dwolla through various means. If you want to pay with Dwolla, you can “send money to email addresses, phone numbers, Facebook friends, LinkedIn connections, Twitter followers, and businesses.”

Dwolla has a mobile app that allows you to transfer funds from your smartphone. You can use Dwolla from your iPhone, Android phone, online, or from a merchant’s kiosk or a Dwolla-enabled point-of-service.

Why You May Not Like Dwolla

Dwolla does not have a debit card. This has been hard for me to get used to. But with a little pre-planning, I can transfer funds to my checking account and use that debit card. Easy peasy.

Dwolla is relatively new and unheard of; therefore, you will not find it accepted by a lot of merchants. However, if you enlighten them, and they choose to open a Dwolla account, you get a $10 transaction credit to your account.

Your e-commerce platform may not support Dwolla. I use E-junkie, and they do not. Consequently, I continue to use PayPal for my eBook sales while researching the platforms that do work with Dwolla.

Bottom Line

I have had my Dwolla account for several months now and have been very happy with it. I do not feel that they misrepresented themselves in any way and their customer service has always been prompt. What about you? Have you tried Dwolla?

Leave your thoughts on Dwolla in the comments section!


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  1. RedBaron

    Sorry you didn’t talk about the main reasons some of us are stuck with PayPal and that is eBay. How practical is it to use Dwolla in lieu of PayPal?

    • Carol J. Alexander

      I understand that, RedBaron. And it is unfortunate. Like I said, I too am stuck with PayPal until something gives with my e-commerce provider.

  2. Neil

    I read the first reference to your physical bank, and spent a few moments wondering if it was simply a typo (“bricks and mortaL”), or rather – this being a Christian PF site – a brilliantly succinct commentary on the difference between “storing up things where moth and rust corrupt, and where [PayPal sneak in and charge fees]” on the one hand (Mortal) and “storing up for yourselves treasures in heaven” (Spiritual)!

    Whichever it was, I love the idea of a “mortal bank”. I believe I may use it myself, if I may 🙂

  3. Sunganani

    Dwolla seems to be a winner except that they seem not open to non-US users yet. They are asking for my US phone number and this is where they may lose out compared to paypal. It is a great concept though.

    • Carol J. Alexander

      You’re right, Sunganani. I’ve realized just this week how important it is for your banking institution to be ‘foreign commerce’ friendly.

  4. jerrylewis

    Thanks for sharing this post. This is very informative and gives me an option to open a dwolla account, never heard of this site until now. Since it does not keep a 30 percent of your income its quite fair.

    • Carol J. Alexander

      Oh my, JerryLewis, that’s 3%. But still, to me 3% is a lot.

  5. Nancy Smith

    Sorry.. but when you compare paypal to a bank, you are not comparing it equal. Paypal is a merchant service. It allows you as a seller to take all types of credit card payments. If you used your bank services, they would charge you $30+ every month whether you used the service or not, then when you used the service the would charge you a transaction fee for each service. Granted the transaction fee is ususally less than paypal’s transaction fee, but paypal does not charge a monthly fee. We have opted for paypal because, they are everywhere and convenience for our customers is key and also because they do not charge a monthly fee. Dwolla might be an added service that we use, but I am not getting rid of my paypal option.

    • Carol J. Alexander

      You make a good point, Nancy, that I had not thought of. Thanks for sharing.

  6. Larry

    Thanks for this review. Can Dwolla provude a feature like PayPals Donate button or accept the senders voluntary gift to me using my email to receive i?

    I undestand you may not have the answer.
    Thanks again

  7. Thanks for forwarding this information to me. I just opened my account through Dwolla and am very glad I can save quite a few dollars that way. Thanks a lot for your wonderful information. It’s greatly appreciated!

  8. Ginn Dutch

    Your bank stocks Coke in their fridge for you? What part of the country is this bank? I have never heard of that! A cold Diet Coke for me would make me a loyal customer…