Startup Dwolla said Monday that the company is officially announcing its payment service, although it may only be appropriate for local businesses in both Iowa and California right now.Dwolla's a bit of an oddity in the startup space: a company that is not trying to change the world overnight. "Dwolla has a very methodical growth plan which does not include world domination," the company said in its initial blog post last year. "Just a good and reliable service."Like PayPal, Dwolla offers merchants the ability to have customers pay in "Dwollas," or virtual currency. Since Dwolla charges only 25 cents per transaction, with free signups and no monthly fee, the per-transaction fee is substantially less than what a credit-card merchant or other vendor might charge, making Dwolla more attractive financially. Funds held in a Dwolla account are held in FDIC and NCUA insured financial institutions, the company promises.The problem, however, is that Dwolla isn't a bank; as a payment processor, it needs to seek licenses in each individual state, according to founder Ben Milne. The company soft-launched in its home state, Iowa, last year, and has now expanded into California to try and tap into the states' tech-friendly market, Milne said.The other issue is that a company's customers (which may or may not reside in the state in which a Dwolla customer does business) can only use the service if both the business and the individual customer reside in a Dwolla-licensed state.Aside from those issues, Milne promised a familiar experience: users link a checking or savings account to Dwolla, and a customer transfers a given amount to the service. Dwolla then takes its 25-cent cut and passes the payment along.As Dwolla grows, one of the areas in which the company will have to invest is conflict resolution, or what happens if merchant A fails to ship a product to customer B, who refuses to pay. To date, Milne said that this hasn't been a problem, in part because the small number of customers itself restricts the number of potential problems."There have been a lot of discussions with a third party who would assure transactions," Milne said. "Right now we go to the authorities" and let them investigate any disputes, he said.