Dwolla stops support for virtual currencies

[yvv]

They aren't "ignoring" their bitcoin customers if they are actively going out of their way not to service their accts, and lose business in the future.   

It may not even be Dwolla's fault and probably the US gov't (backed by Bankers) putting the pressure on them.

I do not share this conspiracy. IMO, dealing with all this crypto technologies, which are in beta phase at best, cost them too much pain in the ass with too little profit.

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[murraypaul]

They aren't "ignoring" their bitcoin customers if they are actively going out of their way not to service their accts, and lose business in the future. 

They've made a simple calculation that the cost and effort required for the Bitcoin related business is more than the fees it brings in.

[yvv]

I don't live in the States and so I am not intimately familiar with how Dwolla works, so what makes them special? How are they different from other payment systems like Paypal? Why can't a Bitcoin company replicate their success?

They are not special at all. I used Paypal for years, but I learned about Dwolla only few month ago, when I tried to buy some bitcoins.

[harposox]

I don't live in the States and so I am not intimately familiar with how Dwolla works, so what makes them special? How are they different from other payment systems like Paypal? Why can't a Bitcoin company replicate their success?

My understanding is that they operate outside of the traditional banking system – they're essentially in the process of setting up their very own financial payments network. Not sure of the actual nuts and bolts, but part of their mission is to provide super-cheap transactions, because in their most basic form, financial transactions are simply exchanges of data. Anything under $10 is free, and anything over – even millions – is only $.25.

This is really a bummer for those of us in the States. Dwolla rocks.

[n8rwJeTt8TrrLKPa55eU]

Suicidal move. One picture worth 1000 words, try it for yourself...

[Mike Christ]

My dwolla account was useless the moment I could no longer use it to fund my Gox account (with that said, my Gox account was useless on that same day lol)

Oh well!  Localbitcoins hasn't let me down thus far.

[p2pbucks]

Go deactivate your account and email them to let them know why.

[ralree]

considering i only used this service to send money to campbx, I'll be deactivating. Also won't be using campbx anymore.

Anybody see an easy 1 click way to deactivate your dwolla account? It is quite possible that I missed the link or button...

See these instructions to deactivate:

http://help.dwolla.com/customer/portal/articles/269223-how-can-i-delete-my-dwolla-account-

[papaminer]

what is dwolla anyway?

is that some form of slang for DOLLAR?



go deactivate your account!

GO BITCOIN OR GO HOME!!!

[jbreher]

Pfft. I have had scant use for Dwolla for some time, and don't imagine that will change much in the future. Those that were around when they wreaked havoc by reversing payments of thousands upon thousands to TradeHill might have an inkling why.

I recently had an interesting email exchange with Dwolla, prompted by their teaser email to me. It is presented here in reverse chronological email threaded order.

Since my last email to them, they have not replied with answers to my direct questions. I wonder why?

Me
OCT 03, 2013
HI, anonymous support person. Once again, I do thank you for the continued dialogue.

Thank you for providing the quote of what your _current_ policy upon reversals (which I had previously been terming chargebacks - sorry for the confusion). It does appear to be these 'reversals' of which I am speaking.

I understand that your current policy makes allowance for such reversals. However, it would appear that it was not always so.

On what date was this policy enacted? On what date was it divulged to customers? On what date did Dwolla stop saying that your service allowed merchants to "rid themselves of chargeback fees"?

The evidence to which I am currently privy suggests that this policy was drafted and divulged _after_ the TradeHill reversal.

See:
http://bitcoinmoney.com/post/8067352221/dwolla-allows-chargebacks
amongst other sources.

Thanks -
<name redacted>

Dwolla Support
OCT 03, 2013
<User>,

Thank you for your email and clarification. I believe the explanation you are looking for regarding Dwolla's reversal policy can be found in our terms of service www.dwolla.com/tos, under section 13 (Reversals) stating:

The recipient of funds may be subject to reversals occurring within the User Account if claims are made by the sending party or by the sending party's Financial Institution.

You understand and agree that:

If there is a reversal of a payment to You, You will be liable to the Financial Institution Partner for the full amount of the reversed payment plus a fee in the amount of $15 ("Reversal fee"). The reversed payment plus the reversal fee is the "Reversal Liability."

Reversals are debited by the Financial Institution Partner in the Veridian Holding Account and will be reflected in Your Dwolla User Account.

If You do not have a balance in Your Dwolla User Account that is sufficient to cover Your Reversal Liability, the remaining balance in Your Dwolla User Account (if any) will be used to cover the Reversal Liability, and You authorize Us, to take any of the following actions:

Debit Your attached Bank Account in the amount of the unpaid portion of the Reversal Liability;
Suspend Your User Account and require You to take immediate actions to repay the unpaid portion of the Reversal Liability; and/or
Engage in collection efforts to recover the unpaid portion of the Reversal Liability.

I hope this is the answer you were looking for in regards to our policy on reversals and what may have occurred in regards to a payment being reversed through the sending parties financial institution.

If there is anything else we can provide for you please let us know, and we would be more than happy to provide additional information regarding this matter.

Have a wonderful day.

Sincerely,
Dwolla Support
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Me
OCT 03, 2013
Hi, anonymous support person. Thanks for the continued dialogue. But let's not be coy here. I think, should you have been at Dwolla any significant time, you'd know exactly of what I am speaking.

The allegation made by TradeHill is that you rescinded a large payment to them after first transmitting the payment. This is what I am referring to as a 'chargeback'. I understand that the backend payment networks allow a payer to claw back a payment already made to a payee. This is what is alleged to have occurred. I don't recall the details, but my impression is that several dozen thousand dollars involved.

Here's a nice summation:

http://www.americanbanker.com/issues/177_45/tradehill-dwolla-bitcoin-exchange-digital-currency-lawsuit-1047273-1.html

I note that in the article, Lampe refuses to meaningfully address the question.

This is what I mean when I say I "never heard an explanation" about Dwolla's conduct in this event. Who shall address this issue, and provide me with any rationale for what appears to me -- at least on the surface -- as a theft of other's property?

<name redacted>

Dwolla Support
OCT 02, 2013
<User>,

Thank you for your email. I would be more than happy to provide an explanation for you. Would you be able to provide more details surrounding your question? What are you referring to in regards to "charging back against accounts."

Thank you for your clarification, and we look forward to answering any additional questions you may have.

Me
OCT 01, 2013
Original message
You sent an email asking bout my recent non-use of my account.

Quite frankly, I am somewhat reticent to use your service due to the TradeHill fiasco some months back. I've never heard an explanation of how you might have charged back against their account, given your then-advertised policy of no chargebacks.

Does anyone care to explain this to me?

<name redacted>

Dear <User>,

It looks like there has not been any activity in your account over the past month.

We've been busy building some really exciting things and wanted to reach out to see if there is anything we can do to help you have a great experience moving money!

If there is anything we can assist with, please visit our FAQ section or contact our customer support team by email: support@dwolla.com.

Thank you for being a Dwolla member.

Sincerely,
The Dwolla Team

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edit: added one more close quote above, to put the following in the proper context

My guess is that they have not answered my last round of direct questions, as it shows them in a very poor light. I have my own opinion of them based upon this event, which dealt a severe blow to an honest exchange that could have possibly given Gox a contest for the title of most meaningful exchange.

[TheButterZone]

Of course they won't respond with anything but boilerplate when what they say may be used against them in court. LOL

[cbeast]

First Mt Gox, then BitInstant, now Dwolla. Americans BTC users don't have many options for exchanging local currency.

[MicroGuy]

It is not the war, it is ignoring. Crypto coin adopters are freaking negligible number of people, and this number is not going to grow in observable future. Who would bother about 0.1% of customers?

The email said .1 percent of Dwolla "merchants". I suspect that Bitcoin transactions account for a substantial percentage of their total volume.

[tclo]

It is not the war, it is ignoring. Crypto coin adopters are freaking negligible number of people, and this number is not going to grow in observable future. Who would bother about 0.1% of customers?

The email said .1 percent of Dwolla "merchants". I suspect that Bitcoin transactions account for a substantial percentage of their total volume.

Yes that is just "spin" and I'm sure you are right.

[LorenzoMoney]

Not only that but Bitfunder.com is now closed for USA users. BTCT closed down.

Bitcoin is set to become the World minus USA currency.

First Mt Gox, then BitInstant, now Dwolla. Americans BTC users don't have many options for exchanging local currency.

[Come-from-Beyond]

The War on Bitcoin continues...

Bitcoin has already won.

[JackH]

The War on Bitcoin continues...

Bitcoin has already won.

It must be hard for those centralized services to come to understand that the power they once held by shutting down accounts and freezing assets is now over. We have an alternative, and while they still do not fully grasp that we are mocking them, they are really trying hard to sound professional and in control.

Dwolla is a great example on how users could care less about now that something such as Bitcoin exists. This behavior we will see more and more from centralized services that will close operations, while at the same time thinking they are the greatest achievement to mankind.

[Kluge]

Not only that but Bitfunder.com is now closed for USA users. BTCT closed down.

Bitcoin is set to become the World minus USA currency.

First Mt Gox, then BitInstant, now Dwolla. Americans BTC users don't have many options for exchanging local currency.

Minus Thailand, too, and it's legally iffy in China.

Shrem gave a talk at a Bitcoin conference a few days ago saying BitInstant will be back and ready to tackle regulatory issues (paraphrasing), so there's one thing to look forward to. If you want cash back once you're in the system, though - you'll probably have to do it locally. BTC price will skyrocket!  

[greyhawk]

Not only that but Bitfunder.com is now closed for USA users. BTCT closed down.

Bitcoin is set to become the World minus USA currency.

First Mt Gox, then BitInstant, now Dwolla. Americans BTC users don't have many options for exchanging local currency.

Minus Thailand, too, and it's legally iffy in China.

I thought China had outlawed all types of virtual currencies? Or was that only WoW Gold?

[Kluge]

Not only that but Bitfunder.com is now closed for USA users. BTCT closed down.

Bitcoin is set to become the World minus USA currency.

First Mt Gox, then BitInstant, now Dwolla. Americans BTC users don't have many options for exchanging local currency.

Minus Thailand, too, and it's legally iffy in China.

I thought China had outlawed all types of virtual currencies? Or was that only WoW Gold?

They don't seem to be prosecuting any of the existing services (even when BitcoinChina has done roughly the same volume as BTC-E and Gox in the last 24h, though a fair bit less than BTS). Could be they're ignorant of the services, are giving them tacit approval before they rewrite the laws to make what they're doing legal, or something else.