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Dwolla, an online mobile payment platform operated by The Members Group, is eliminating the 25-cent fee it charges for small-dollar payments - those under $10. TMG, a payment processing firm owned by a credit union group, said the move is intended to make Dwolla more attractive to both merchants that deal in small-dollar products (like coffee and snacks) and to younger consumers.

Dwolla is more than just an online mobile payment platform. Its "wow factor" is its social networking interface. So, for example, someone using Dwolla to purchase a cup of coffee can broadcast that fact via Facebook, and instantly 100-plus friends know all about it. Think of it as free advertising.

So what does this have to do with microfinance? Plenty. Each new micropayment initiative that hits the market is another opportunity for micro-entrepreneurs to compete with more traditional merchants. To survive in most businesses these days, you need to be able to accept credit and debit cards. But traditional card acceptance fees are pricey and too confusing for the typical small upstart. Hence the introduction of mobile gadgets like the Square mini card reader.

Meanwhile, Intuit Inc., which in addition to accounting software also supports electronic payment applications, is planning to roll out a prepaid card account that unbanked merchants can use to deposit funds accepted using Intuit's GoPayment device, according to published reports. GoPayment, like Square, runs off the telephone jack of mobile smart phones.

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See the original story in The Green Sheet