Dwolla founder Ben Milne talks about the future of mobile commerce [Interview]

In case you missed it, The Next Web will be at The Future of Mobile Conference in London this Friday. And if you’re still debating whether you should be there too, check out 5 reasons why you should be there.

Running on Friday, 16th September 2011, the one-day event will host a plethora of world class speakers and visionaries, who will deliver insights on HTML5, gaming, Android, iOS, Windows Phone, and more.

One of the speakers is Ben Milne, founder of Dwolla. If you’re new to Dwolla, it’s a US-based peer-to-peer Web and mobile payments platform along the same sort of lines as PayPal. Read our initial coverage of this startup from January, two months after the Des Moines, Iowa, company launched to the public.

Back in June we wrote about Dwolla opening its API, and in July we reported that Dwolla was churning out over $1m worth of transactions each day. And only a few weeks ago, we covered its new feature called Proxi, which is a peer-to-peer system that enables consumers to send payments to other nearby users, without the need for an NFC (near-field communications) chip.

In advance of his presentation at The Future of Mobile Conference this Friday, The Next Web caught up with Ben to get some of his thoughts on Dwolla so far, and the future of mobile from his company’s perspective…and we also took a sneak peek at the sort of things he’ll be discussing during his keynote.

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Oh, and The Next Web has also teamed up with the conference organizers to offer some special discount tickets too – to receive 20% off the ticket price, simply use the promo code FOMTNW, when booking online.

Meet Ben Milne, founder of Dwolla

The Next Web (TNW): It’s been over 3 years since you started working on Dwolla, and about ten months since public launch. Looking back, what have been the biggest challenges you’ve faced getting to where you are today?

Ben Milne (Ben): I’d have to say the regulations. It took us a long time to figure out how to legally get out into the marketplace, I basically spent a year of my life trying to figure that out. After that, it’s pretty much been ‘What do our customers want?’, ‘What do we build?’, ‘What are the main problems we’re trying to solve right now?’. But the single, biggest hurdle we’ve had has been regulation.

TNW: So would you say you’ve had to become an expert in this area to progress Dwolla?

Ben: I would say there are lots of people out there that are smarter than me in this space, but I definitely went through the wringer on this one. I’ve learned a lot about how to structure companies and how regulatory models work. But it’s part of being an entrepreneur – you have to solve problems.

TNW: You’re only open to US customers at the moment, but what are your international plans for Dwolla in the next few years – are you looking further afield?

Ben: Yeah we are, but it’s really all a staffing issue at the moment. With the influx of new users that would come with a global expansion, we’d have to staff-up significantly. And we’re still dealing with growing pains at the moment, rising from a two-person company to a 15-person company over the last 6 months, so managing how we’d go from 15 to, say, 60 is a totally different process.

TNW: And I guess you’ll have to learn a whole new lot of regulatory processes too for different countries?

Ben: Yeah, absolutely. The time in between, actually, is a good time to figure out what the regulatory processes are in all the different countries. So there’s a lot of opportunity there to leverage the time and research exactly what we need to do. We’ve been doing a lot of that over the past six months, looking at what countries are next.

TNW: And what countries would they be?

Ben: I have a pretty good idea, but I’m not ready to say quite yet.

TNW: On a scale of 1-10, where do you think Dwolla currently is in relation to where you’d like Dwolla to be at its peak?

Ben: We’re at zero. We’re still new in the marketplace, we’ve had some early validation but there’s still a lot of work to do. The next step over the next 12-24 months is ‘how do we get to ‘2 or 3′ on that scale?’. From a user perspective, that next ‘hump’ for us is getting over 100-150k users, and what it will take for us to get there. We have around 40,000 users at present.

TNW: What’s the feedback been like so far for Dwolla…has it been universally positive?

Ben: Not universally. One of the things with Dwolla is we’re setting out to build a new network…more like Visa and PayPal. There are many facets to building that network that aren’t ideal, a lot of big market problems that we need to find solutions for. But I will say that there has been a lot of excitable feedback

TNW: You recently launched Proxi. Can you explain, in laymen’s terms, the key benefits of Proxi over near-field communication (NFC)?

Ben: From a behaviour perspective, Proxi allows you to take your phone and go anywhere you want and pay for things. It’s basically a floating contacts list and shows who around me I can transfer money to via Proxi. It’s a software solution to a hardware problem, whereas NFC requires special hardware to complete a transaction. And it’s just leaving private beta now.

TNW: A lot has been written about a so-called cashless society emerging. I think someone at Visa claimed back in 2007 that we’d be there by 2012. Whilst that’s clearly not going to happen do you envisage a time when cash will be obsolete?

Ben: I actually think this will be a lot easier in developing nations than developed nations. Places where you’re not already likely to have a credit/debit card in your pocket. We’re already seeing a shift in that direction now though, whether it’s through sending money by SMS or other means. People are starting to adopt multiple platforms, and I think we’re in the middle of the process just now.

TNW: What else have you been focusing your efforts on recently?

Ben: A lot of what we’ve been doing has been based on the questions people have or things the users don’t like about the current platform. As you probably know, we’ve been leveraging social networks too and we’re adding LinkedIn now, so money can be sent through there now. We recently added the ability to send money through telephone numbers too, so we’re basically adding any unique identifiers people have.

TNW: What do you think the biggest challenges are for contactless payments?

Ben: I think a lot of it is hardware. Hardware, education and behaviors. What will make users take their phone out of their pocket rather than a card? I’m not sure that’s been completely cracked yet, but once it has been that will help.

TNW: People took a while to trust websites when entering payment details, but we’re definitely at a point now where e-commerce is widely trusted and used. How about m-commerce – how much do you think it has to catch up with computer-based commerce, in terms of trust?

Ben: Yeah, I think a little bit of ground has to be made. But I think mobile is a very obvious extension of the Web, so there will be less of a barrier to mobile from the Web than there was initially from retail to the Web.

TNW: It’s only a few days until you’re speaking at the Future of Mobile Conference in London – what’s your plans for when you’re over here?

Ben: I’m just coming for the conference, I think I have a spare day whilst I’m over and I’ll probably just stick my backpack on and take a wander ’round the city. It’s my first time in London.

TNW: Can you share a little bit about what you’ll be talking about at the ‘Future of Mobile Conference’ on Friday?

Ben: Yeah, there’s a lot of ranting. I’ll be talking about real currency vs. virtual currency – I’m a big fan of ‘real’ money. When I get paid or when I buy a coffee there’s no credits involved, it’s real money. I’ll also be talking about building payments into applications and how APIs can be leveraged to do that, whether that’s Google, Amazon, PayPal or us.

I’ll also be talking about the transition from cash to mobile, looking at the things that mobiles can do that plastic cards can’t.

TNW: Thanks for talking to The Next Web Ben, and we’ll see you at the conference on Friday.

The Future of Mobile Conference: The need-to-knows…

What? Future of Mobile Conference
Where? Mermaid Conference and Events Centre, Puddle Dock, Blackfriars, London EC4V 3DB
When? Friday 16th September, 2011 (09:00 – 17:40)
How much? Conference Day Pass (£245 + VAT). The Next Web readers will receive an exclusive 20% discount by using the promo code FOMTNW, when booking online