Most college-age kids are thrilled to open their first credit card account. Ben Milne was not one of them.

Back when he was 18, Milne, the founder of Dwolla, a cashless payment start-up, dropped out of the University of Northern Iowa and launched Elemental Designs, an e-commerce site that sold speakers. After three years, the company was topping a million in revenue, but Milne was paying up to $55,000 in interchange fees—a small percentage of each transaction taken by credit card companies. In a resale business like Elemental Designs, where margins are king, a small percentage fee could make or break the profitably of a sale.

"Basically," he says, "I got really, really pissed off about interchange fees."

So in 2008, Milne sold Elemental Designs to focus on what would eventually become Dwolla (a portmanteau for "dollar" and "web"), a payment network that circumvents interchanges fees for merchants. The company, based in Des Moines, has a fairly simple proposition: Users sign up for a Dwolla account by entering their social security number and bank routing number. Then, to pay a merchant or a friend, the user can send a payment directly from their checking account through an e-mail, text, or directly to another Dwolla account. They can also use Facebook, Twitter, and LinkedIn to send money. Transactions under $10 are free; above $10, Dwolla takes 25 cents.

"Basically, I got really, really pissed off about interchange fees."
--Ben Milne, founder of Dwolla

Behind the site's sleek, consumer-facing exterior is a deeply developed web of connections between banks, credit unions, and even the Federal Reserve. From 2008 to 2010, Milne threw himself into the world of payments, becoming an expert on the Automated Clearing House, the 40-year-old electronic network between financial institutions that’s a notoriously convoluted and complicated system.

"I think the stunning thing—the most distinctive thing—about Ben, is that I've never once seen him frustrated," says Matt Harris, one of Dwolla's investors. "He's just a really positive guy. He kind of just smiled his way through the thorn bushes."

It didn't take too long for Dwolla to catch on.  By the beginning of 2012, the company began processing $30 to $50 million a month in transactions, and signed up more than 100,000 users. Investors, too, took notice. Milne's assistant had to create an Excel spreadsheet to keep track of some 700 suitors wanting a piece of Dwolla.  In February, Dwolla raised a $5 million Series B round of financing, and in April, the company hired its 25th employee in New York.

Milne says he's not after creating the next PayPal—in fact, his sights are much higher.

"I'm not sure at what point a light bulb goes off and I say 'We’ve succeeded!' but I do know that we have a long way to go," Milne says.