The Department of Homeland Security appears to have shut down the ability to use Dwolla, a mobile payment service, to withdraw and deposit money into Mt. Gox, a Bitcoin trading platform. A Dwolla representative confirmed the move to Betabeat.

A representative for Dwolla told Betabeat that the company is “not party” to this matter and encourages those with questions to reach out to Mt. Gox or the DHS.

“The Department of Homeland Security and U.S. District Court for the District of Maryland issued a ‘Seizure Warrant’ for the funds associated with Mutum Sigillium’s Dwolla account (a.k.a. Mt. Gox),” he said. “In light of the court order, procured by the Department of Homeland Security, Dwolla has ceased all account activities associated with Dwolla services for Mutum Sigillum while Dwolla’s holding partner transferred Mutum Sigillium’s balance, per the warrant.”

Mt. Gox has posting the below statement to their Facebook page.

Like many who have contacted us, MtGox has read on the Internet that the United States Department of Homeland Security had a court order and/or warrant issued from the United States District Court in Maryland which it served upon the Dwolla mobile payment service with respect to accounts used for trading with MtGox. We take this information seriously. However, as of this time we have not been provided with a copy of the court order and/or warrant, and do not know its scope and/or the reasons for its issuance. MtGox is investigating and will provide further reports when additional information becomes known.

Below is a screen shot of the email being received by Dwolla users who have recently made trasnfers to Mt. Gox.

However it seems that Dwolla is going the way of PayPal and has now begun suspending accounts do to ‘suspicious activity’,  especially the accounts of user who it suspects are acting as a virtual currency exchange, forbidden in it user agreement.  And it seems this move may be due to regulatory pressure.

“Since those early days, tension has built between Dwolla and Bitcoiners and may have just reached the point of no return: Dwolla has moved beyond closing the accounts of those it can prove are operating unlicensed exchanges and has begun closing the accounts of private individuals based on a mere affiliation.”

The posts author contacted Dwolla for comment to notify them of the article and for comment. Their responce…

“We appreciate the heads up, but I don’t know if I’ll be of much help.

It’s an odd, highly-regulated world that Dwolla has made the choice operate inside of. Where some scenarios appear black and white, rules and procedures can often add layers of grey. Of course, it’s on us to find new ways to balance convenience, safety, and privacy with these requirements and see through the grey, but it’s important to note that we’ll always err on the side of caution. We understand that being misunderstood by our own users sucks, but if it means protecting the network and the community, we’ll do it.”

Read the article in its entirety here.

“Iowa is accepting some tax payments using startup money transfer platform Dwolla, Governor Terry Branstad announced today. The option will first be available for businesses paying the cigarette stamp tax, which accounts for about $100 million of Iowa’s revenue each year. But Gov. Branstad said the state would consider expanding it to other fees and taxes.”

“‘This is just the first,’ he told Fast Company.”

“Because [Dwolla] cuts out middlemen such as credit card companies, it is able to charge a favorable rate. Transactions less than $10 are free, and transactions for any greater amount cost $.25.”

“This consistent and relatively low transaction rate makes Dwolla particularly attractive to businesses and now–it hopes–governments that regularly transfer large amounts of money. Only about 11% of transactions made on the platform are between individuals.”

“A government embrace of Dwolla could save users money. As one policy advisor to Gov. Branstad put it, “there is no line item for paying Visa in the budget,” and payment processing fees generally get passed on to citizens in the same way businesses pass them onto customers. A lower payment processing fee could mean a lower amount due.”

Read the Fast Company post here.

Last month Dwolla solved the “chicken and the egg” problem by introducing a guest check out option.

Dwolla’s Jordan Lampe explains “One of the big pain points [for Dwolla] was that to make a payment online, you had to have a Dwolla account, and you had to have money in that account,… So what we’re doing with this is saying, ‘let’s cut ourselves out of the equation.’”

The guest checkout service makes it possible for non-Dwolla users to pay with Dwolla on e-commerce websites. The service allows anyone with a U.S. bank account to buy via a one-time payment from their bank which is then processed through Dwolla’s payments network.

Consumers can make a payment by entering in their bank account and routing number in addition to their name, address and phone number. The benefit to consumers of using this option is that their financial information is never shared directly with the merchant and they may possibly get a discount.

Because customers are not using credit cards, merchants are not stuck with credit card processing fees. This allows merchants to pass on some saving to customers using the Dwolla option.

Dwolla Price….

This week Dwolla launched it’s Twitter payment service. This allows Dwolla users to send money to any of their followers with a tweet.

All you need to send money is your followers Twitter handle, the $ amount, and #dwolla. Like this…

You can send funds to any of your followers, but for them to collect it they will need to sign up for a Dwolla account.

Dwolla has integrated with a number of social media services. You can also send money to a friend using Facebook or LinkedIn.

Dwolla has just announced their new mass payment system, appropriately titled MassPay.

This service offers businesses a faster and simpler alternative to check-writing and wire transfers, by allowing them to pay up to 2,000 people at once. It is seen as an attempt to take on PayPal whose own Mass Payment service only supports payments to 250 recipients, and charges 2% for each payment.

All that a Dwolla client needs to do to use the service is upload a CSV file with just two columns: one colum containing the email address, phone number or Dwolla ID of the recipients and the other containing the amount to be paid.

Further details on the service can be found here and the below video demonstrates the MassPay service.

Video Link