Prediction: Dwolla will get bought by a huge banking conglomerate

[rjk]

Why do cash deposits have a higher fee? Doesn't that method have zero possibly of reversals and the lowest fraud?

Its the most expensive and least profitable revenue stream for us. We have merchant fees associated with doing cash deposits.

Ah that sucks. You would figure that the banks would make it cheap when there is no chargeback risk, but I guess they don't. Broken banking system is broken.

[tarrant_01]

It probably has something to do with all of the money laundering / illegal activity fear.

[tonto]

Will BitInstant report a bunch of $9999.99 daily transfers?  If the answer is "no" then I will gladly pay a small % fee

[Yankee (BitInstant)]

Will BitInstant report a bunch of $9999.99 daily transfers?  If the answer is "no" then I will gladly pay a small % fee

LOL 

[tonto]

I was totally serious, btw.
 
What is the "rule of thumb" for reporting transfers?  I see you allow something like $500 per transfer not to exceed $4000/day.. if you had those daily for a month (or more) would you report them, or allow them unreported?

[Yankee (BitInstant)]

I was totally serious, btw.
 
What is the "rule of thumb" for reporting transfers?  I see you allow something like $500 per transfer not to exceed $4000/day.. if you had those daily for a month (or more) would you report them, or allow them unreported?

Sure, see below. One thing to note is 'Suspicious Activity' does NOT mean its illegal, it just means that the government would like to have on file, that I've reported such things.
MtGox, TradeHill, and other exchanges have extremely similar requirements (To the best of my knowledge)

This only applies if we don't have your records (ID, utility bill) on file. We have arbitragers and high volume traders that go well beyond these limits and we dont have to report.

Suspicious Activity - Defined

It is impossible for the directorate to define all activity that would qualify as suspicious. However, the following guidelines quantify the types of suspicious activities that BitInstant will monitor for.

Suspicious Activity

1.   Two or more deposits made during a week, where the total amount of the deposits is greater than $10,000.
2.   Two or more deposits made during a month, where the total amount of the deposits is greater than $20,000.
3.   Two or more cash deposits made during a quarter, where the total amount of the deposits is more than $36,000.
4.   Any one time cash deposit between $8,000 and $10,000.
5.   Transfers equal or above $4,000 in a day.

-Charlie

[tonto]

Do you have to 1099 those accounts, then, or what does "reported" mean?
 
So to fly under the radar, would I be "safe" if I limited myself to transfers of only $400 per day?

[Yankee (BitInstant)]

Do you have to 1099 those accounts, then, or what does "reported" mean?

Reported means we fill out a simple 'SAR' or Suspicious Activity Report

Sample: http://www.fincen.gov/forms/files/fin109_sarmsb.pdf

So to fly under the radar, would I be "safe" if I limited myself to transfers of only $400 per day?

Yes, as long as you stay within our limits and/or keep in touch with us as to your purpose of the transfers you should be fine.

Again, arbitragers, traders, ect.. need not worry

[tonto]

Do you have to 1099 those accounts, then, or what does "reported" mean?

Reported means we fill out a simple 'SAR' or Suspicious Activity Report

Sample: http://www.fincen.gov/forms/files/fin109_sarmsb.pdf

So to fly under the radar, would I be "safe" if I limited myself to transfers of only $400 per day?

Yes, as long as you stay within our limits and/or keep in touch with us as to your purpose of the transfers you should be fine.

Again, arbitragers, traders, ect.. need not worry

Ok thanks, I'm just curious as to the whole reporting process, and each step on the way.  I don't care if my final bank 1099s me, or whatever (since it would then start accruing interest), but I want minimal hassle along the way.

[siggy]

We are strictly talking about deposits here. Deposits are more expensive because we need to verify identity and KYC

OK, so will you even be offering Withdrawls as a service?  The recent Dwolla-delays are MTGOX are starting to really annoy me. 

thanks,
Sigg

[check_status]

So to fly under the radar, would I be "safe" if I limited myself to transfers of only $400 per day?

Actually $394.52 per day will keep you under the deposit reporting limit if your going to deposit cash daily for 365 days per year.

The term 'Transfers' = withdraws ?

[tonto]

Well I guess I read it as transfers (like from Liberty Reserve to MTGox, for instance (through AurumXchange right now)... so if the "middle-man" doesn't matter, then I won't worry about it, but if from, say, Dwolla to my local bank account has to report said transfers, that's what I was talking about.  I'm fully aware my local bank might report deposits or transfers.  Although, in my opinion, banks should give two shits less where your money comes and goes, but I'd like to stay under the radar.

[Stephen Gornick]

Heh, Dwolla gets an A+ grade!   

"Dwolla Complaints & Service | A+"
 - http://www.cardpaymentoptions.com/credit-card-processors/dwolla/

[Dalkore]

I used to work in ACH for a major bank.   I understand the inter-workings of the ACH network and I am very glad people are paying attention to this subject.  THIS IS A VERY IMPORTANT ISSUE.   ACH access is critical to a smooth working of the current Bitcoin market.   I have some ideas along these lines that I am going to explore down the road.


Dalkore

[Yankee (BitInstant)]

I used to work in ACH for a major bank.   I understand the inter-workings of the ACH network and I am very glad people are paying attention to this subject.  THIS IS A VERY IMPORTANT ISSUE.   ACH access is critical to a smooth working of the current Bitcoin market.   I have some ideas along these lines that I am going to explore down the road.


Dalkore

Welcome to the club

[Littleshop]

a fraction of the current cost

Isn't their current cost 25 cents for each transaction? That's pretty cheap.  Do you plan on matching that instead of the 3.99% fee now?

The 3.99% fee is only for cash deposits.

Dwolla's fee is $0.25 but it takes 7 days to get verified and set up.

If I can do ACH for about 1%, but the turnover is about 24 hours, would you pay it?

When my Dwolla account receives cash, its automatically moved to my checking account, and shows up within 2 business days.  I'd much rather pay $0.25 than 1%, even if you claim you can cut the wait time in half (2 days -> 1 day).  How long it takes to verify your account the first time is pretty irrelevant.


A 1% fee is simply too high to process a withdrawal.  It would cost me at least 50x what I pay Dwolla, if not more.

While I have been selling locally most of the time. When I used mtgox/Dwolla it was for amounts generally around $400.  The of 25 cents is too low and subsidized (thank you??).   .5% or $1-$2 would be much higher then Dwolla but I would gladly pay it to a company like BI that is in the bitcoin community.

[Raize]

. . . and abandon its support for Mt.Gox...

I am virtually certain they will get bought, it happens to so many similar companies.

It's more likely they would drop support for Mt Gox, but it seems like Dwolla is willing to go whatever extra mile to make things work. I suspect it is because they are working with federal agents who are far more interested in who is taking money from known Bitcoin traders than who is putting money in.

Honestly, without any proof of a major buyout this is speculation at its worst. We already know Ben Mlone's hubris and arrogance would never allow him to sell Dwolla. He legitimately thinks he's the next Paypal.

[Dalkore]

Honestly, without any proof of a major buyout this is speculation at its worst. We already know Ben Mlone's hubris and arrogance would never allow him to sell Dwolla. He legitimately thinks he's the next Paypal.

Paypal was purchased by eBay so that may not bode well for the future.


D