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I still don't see how Dwolla is different than a young PayPal. PayPal has offered free, ACH-funded person-to-person payments for 12 years. You only start getting charged 2.9% when you upgrade to accept credit cards; PayPal could drop the fee for ACH-funded payments any time they want to undercut Dwolla.

What is Union Square Ventures betting on?

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Dwolla is different because they're not building a PayPal, their building a Visa. Long term that's their vision. That's what USV is betting on that someday you'll be paying with Dwolla at Walmart.

Yet PayPal is already doing that too.

http://www.chicagotribune.com/business/breaking/chi-paypal-t...

Exactly, they both see the end game.

When I referenced Paypal, I meant it in terms of what we traditionally think of as Paypals core business which is online payments made via checks, credit cards, and debit cards.

Perhaps they're betting on PayPal's terrible reputation.

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