Dwolla (dwolla.com) is a Des Moines, Iowa-based startup that is on a mission to radically change the electronic payments industry. The company was founded in 2008 on the premise of bypassing credit card Interchange fees (aka: swipe fees) and providing a low-cost payment service to businesses and consumers. Dwolla has created a proprietary payment network similar to that of VISA and MasterCard, and Dwolla’s network does not charge a fee for the transaction like a traditional merchant account does (costs will be covered below). Instead, the company eliminates credit card use altogether by linking consumers’ Dwolla accounts with their checking accounts. The service may sound similar to PayPal, and in some ways it is, but Dwolla is approaching the concept from a very different angle.
Although Dwolla’s payment concept is not exactly a new one, its marketing and business strategy is completely unique. With help from a few banking and financial institution investors, Dwolla has created a payment network that eliminates all of the common fees that merchants incur from accepting card payments. Additionally, the company’s network eliminates the common transfer delays and fraud that plagues similar networks such as the ACH network that most banks utilize. Essentially, Dwolla is a global system for free, instant cash transfers.
Dwolla can be used for payments between individuals, businesses, or both, but the focus of this review will be the consumer-to-merchant acceptance side. In the past year, Dwolla has shifted its marketing to emphasis its tools for developers who need a mass payout API for marketplace-style and business-to-business payments. Merchants can accept payments the same way individuals can pay each other, or they can use features that are better suited for their needs. These include website integration and plug-ins for shopping carts as well as tools that can be used to accept payments at the merchant’s location. The company has made major headway in the payments market and has reported that it is processing $30 to $50 million in transactions every month. Ben Milne is listed as the CEO of Dwolla.
- Sales & Marketing: Dwolla does not appear to hire independent sales representatives and has received no merchant complaints about its sales practices.
- Costs & Contract: Dwolla offers custom pricing for all accounts but has historically allowed users to transfer payments on its network for free.
- Complaints & Service: Dwolla has received more than 40 public complaints.
- BBB Rating: Dwolla has a “B” rating with the Better Business Bureau and has received 10 complaints in the last three years.
- Rates & Fees: How Merchants Got The Best Rates With Dwolla