Ashton Kutcher’s investment firm, A-Grade Investments – a venture capital fund founded by some long-time friends – has invested in Dwolla (Dwolla.com), a money-transfer tech startup company headquartered in Des Moines, Iowa.  

Dwolla provides an online payment system and mobile payments network, letting users do electronic payments for online transactions. It is a low-cost financial payment system that supports bank transfers for a flat fee of 25 cents per transaction (transfers under $10 are free), unlike PayPal (News - Alert), which supports credit/debit cards and ACH/bank transfers all for free.

Dwolla provides secure transactions for transfers, like PayPal, but supports U.S. only banking, whereas PayPal supports global banking. So, what advantages does Dwolla have over PayPal (which is built on top of the Visa and Mastercard network) that would convince Kutcher and others to invest in this firm? Or why Dwolla’s system (which is built on a network of its own) attracts potential customers? 

Those with Dwolla accounts made some positive comments; they believe it has the benefit of a low cost, and it’s a low risk payment alternative for commerce. As for why Kutcher invested in Dwolla, he told The Des Moines Register he wanted to help build a "killer" company in Iowa "and put a bunch of people to work [there]."

An Iowa native, Kutcher, accompanied other early investors in Dwolla who most likely foresaw the benefits of the new payment network: Dwolla’s services proved essential for business-to-business (B2B) payments, in addition to proving crucial for money-transfer payments between individuals. What is driving customers to Dwolla is that it might be a better deal for many commercial users who can get services cheaper than with other money transfer companies.

Dwolla’s system also has all the services that its online competitors offer their customers, including the ability to transfer money or pay for goods through smartphones via the Internet.

Dwolla’s system is, indeed, also a mobile payment solution. Dwolla stands, then, as a valid alternative to other types of systems for online payments and e-commerce transactions. What makes Dwolla stand out from other payment system type networks is their ability to work with small banks and retailers to offer a cheaper, safer and overall better payment experience for customers.