With the use of a cell phone, money is sent to a bar to pay for a drink, coffee is paid for before the drinker even arrives in the shop and a tenant pays his rent without the convenience fee. 

How? Dwolla.

Dwolla is a way to send and receive money at a flat fee of 25 cents per transaction and was developed after the outrage experienced by Ben Milne, CEO and co-founder of Dwolla, when he realized he had to pay more than $55,000 in credit card interchange fees for around $1.5 million of revenue from a business he previously owned.

“What we’ve done at Dwolla is build new technologies that allow our users to send and receive cash through behaviors and mediums never before possible, ones that we love,” Milne said.

Dwolla enables you to quickly and safely send money to others; Dwolla users and non-users alike. Upon registering for a Dwolla account, you can link your Twitter and Facebook to it and all of your followers and friends become Dwolla contacts.

“For example, we allow our users to pass money between your Facebook friends and Twitter followers and take their real, hard-earned cash with them virtually on a phone,” Milne said. “All of sudden your phone becomes your wallet, and now you can start connecting the dots about how awesome this is for consumers and merchants.”

Upon sending money to a Facebook friend or Twitter follower, Dwolla users can bypass ATM fees and reduce the average 3 percent interchange fee that accumulates to $48 billion that customers and merchants pay through the use of credit cards.

But this is just where Dwolla begins. In early March, Dwolla launched Dwolla Spots.

“Basically what we have is the nation’s first ever location-based payment platform,” said Jordan Lampe, director of communications at Dwolla and ISU alumnus.

Upon downloading the Dwolla application with Dwolla Spots, you can tap on a merchant and commit to your payment on a cell phone. With a nod from the employee, the payment was received.

Currently, few business accept Dwolla as a form of payment in Ames, but around 500 merchants in Des Moines and 1,000 nationally are currently accepting this digital-cash payment, seeing immediate savings.

“It’s a whole new style of transaction,” Lampe said. “We’ve realized that people like to pay for things and exchange money on three different scenarios.”

These styles of payments are based upon location, people you know and online shopping. Dwolla covers all three of these options.

Dwolla could be that payment option for all three, without the increasing fees of credits and the ease of a tweet or a Facebook post.

“We’re the generation of Facebook, we’re the generation of Twitter, we’re the generation of social media,” Milne said. “Dwolla has built new technologies to go on top of those to make it easier for people to understand that cash is not something that is physical anymore, but it’s digital.”

With smartphones taking over the general market, Dwolla has unimaginable room for growth. Even people who adapted Dwolla at the earliest of stages have seen improvements and changes, including Dwolla Spots.

With a monthly growth of 250 percent, they have seen a unique following in Des Moines. They believe this comes from having an open-and-honest business model, where they don’t give out a user’s information.

With such a negative perception toward online transactions, Dwolla assures that they are safer to use than cash, checks or credit cards through their work with the Members Group. This makes it a prime-time saver and cost-reducer for students.

“We’re a generation where we like pixels on a monitor, not ink on a piece of paper,” Lampe said. “We don’t make that transition from cash to the monitor. We are at risk at becoming reliant on these fees that are outrageous that are becoming burdensome on merchants and consumers.”

Lampe said when students pay using anything that is not Dwolla they are incurring fees they might not always be aware of.

“We have to find consumers and educate them and let them know that cash can be something that is digital,” Lampe said.

Lampe and Milne both consider the ISU market to be one that is tech savvy and ready to adapt on to the Dwolla way.

“It’s really a product that’s good for everybody,” Milne said. “If it’s not good for everybody, we’re going to find a way to go back and fix it. That’s a promise everybody at Dwolla is on board with.”

Dwolla is available for use on anything with an Internet connection. The original Dwolla application is available to users with the iOS, Windows 7 and Android operating systems. The updated version with Dwolla Spots is only available to those with iOS, with Windows 7 and Android applications coming in the near future.

“People will say they don’t get it,” Lampe said. “Just try it once and you will have the ease of mind, not having to worry about your change, not having to worry about somebody double running your credit card.”

Dwolla is in very early stages of developing a relationship with Campustown Property Management, which could possibly enable their tenants to pay their bills without additional fees.

“We are always open to options that can save our tenants some money,” said Tobit Bowles, Campustown property manager. “One of the benefits for us would be a lower convenience fee for our tenants and their parents that pay rent online … this is why we try to offer multiple options of payment.”

Bowles is also excited about the ease of the use Dwolla in their transition to paperless money.

“Orange is the new green,” Lampe said. “We are cash for the 21st century.”