Those looking to avoid mounting credit card debt have been turning to other options such as cash, debit and checks in recent months, a trend which could be buoyed by some hi-tech competition.
Dwolla, a Des Moines, Iowa-based business, hopes to harness the growing popularity of social media and turn it into a credit card alternative.
The person-to-person payment service allows cell phone and computer users the opportunity to move money freely back and forth to bank accounts, The Des Moines Register reports. Users of the service may easily wire money or make small purchases directly from an Internet-connected device.
The company has already attracted local investors such as The Veridian Group and Members Group who hope the services could help consumers cut costly fees associated with card use, according to the Register.
“Our customers are looking for ways to be attractive and relevant for a new generation of users,” Jeff Russell, executive vice president of the Members Group of Des Moines, told the news source. “That’s interesting to our clients. This has the potential to catch on quick.”
Dwolla represents the latest in a mass movement towards cheaper credit card alternatives, which includes prepaid debit cards and cell-phone credit cards.