[vsl2]

I wish him well on his endeavor because I'm not a fan of CC fees, but from a consumer standpoint, I don't see any benefits. CCs provide (i) a line of credit, (ii) fraud protection, and (iii) rewards/bonuses. All of these can be incredibly valuable, particularly (ii) - you never appreciate the no-liability fraud protection of a CC until you discover how difficult it is to deal with situations in which your bank account is affected.

If credit cards were not already the dominant electronic payment mechanism (i.e. VISA/MC were just starting like Dwolla is), Dwolla could possibly win out because businesses could refuse CC's. Not going to happen now, at least with regards to business-to-consumers. And I don't think most B2B transactions were conducted through CC's anyways.

They seem to be doing okay now, but I don't see any secret sauce that's going to make them anything more than a fringe player in the payments industry.

[yalogin]

Yes. The fraud protection and line of credit are valuable to people but why is that linked to the processing fee and network? Those features are provided by the bank which only provide them irrespective of the network your purchases are processed on. That is the key.

The main advantage with a card is you can pay with it anywhere in the world. That kind of scale takes a lot of time to achieve and that is the reason the whole ecosystem is milking users.

[nickik]

Isn't it really easy to steel somebodys card? Isn't credit card theft a big problem in amerika? Dept cards are protected with a code so there not that easy to steal.

Im from europe and this is just how it is in my view of the Amerika but I draw my knowlage from movies and stuff so correct me.

[jedbrown]

It's easy to steal a card, but the card companies do pretty good fraud analysis and in any case, the card owner is never responsible for the fraudulent charges. Of course the cost of the fraud monitoring and insurance system are passed on to merchants and those who carry a balance. But if you don't carry a balance, there is no question that a rewards card is the best available payment mechanism. If you use something else, you are subsidizing those who use rewards cards.

[kahawe]

It surely is easy but it doesn't matter - unlike someone stealing your EC card and PIN.