Most of the peer-to-peer (P2P) payment systems we looked at limit themselves to transactions between individuals, but Dwolla allows you to use its app to do person-to-person payments, pay for goods or services, or donate to a nonprofit. Dwolla is available for Apple, Android and Windows phone users. It uses your bank account or Dwolla balance as your funding source; you cannot use it with credit or debit cards.

You can use this P2P payment service online or with the mobile app. With the mobile app, you can send money to people listed in your contacts list. Online, you need the email, phone number or Dwolla ID of the person or institution you are sending money to. If you aren't sure of any of these, you can search the Dwolla system to see if the person or business has an account already in the system. You then click on the person, designate the amount, put in a note if needed and hit Send. The person is notified of the impending payment. If he or she is not a Dwolla member, they need to sign up for an account in order to get the money.

If you want to send multiple payments at once, Dwolla has MassPay, a service that allows you to program in multiple payments. This makes it easy if you want to use the service for paying your monthly bills or doling out allowances to your kids.

Dwolla's transfer limits are high. There is no weekly or monthly limit, and the individual limit for personal accounts is $5,000 per transaction. This makes it convenient when using the app for larger expenses, such as paying rent. It does not charge any fees for the transactions. However, because of this high transaction allowance, it's important that you know and trust the person you're transferring money to or from. If you're selling an item to someone you don't know, you want to verify that the money has cleared your account before your ship or hand over merchandise.

If you use Dwolla to receive money, you can program the app to transfer it to your bank account automatically. Auto-withdrawals take one or two days to process. Not many person-to-person payment apps have this service.

Dwolla does not hold funds itself. Rather, it is sending payment instructions to its financial partners, Veridian Credit Union and Compass Bank. Therefore, your funds are secured at these institutions. However, the money is not FDIC insured. The Dwolla app itself has two-factor authenticator app that you can apply to increase security. The app requires you to have your mobile phone and a password to log in. This app requests you to log in at least once every 30 days in each device you use for Dwolla.

Dwolla is free for casual use, but if you have greater needs, such as next-day transfers, you can get a paid account. Dwolla makes sending and receiving money convenient, not only for splitting the bill with a friend but for paying rent, buying a sweater online or making a donation at church.