|Sales & Marketing|
|Costs & Contract|
|Complaints & Service|
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. 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.
|Dwolla Features||Industries Served|
|Key Points – Sales & Marketing|
|Uses independent resellers?||No|
|Promotes deceptive rate quotes?||No|
|Discloses all important terms?||Yes|
Dwolla primarily markets itself via its website and uses no deceptive advertising or marketing tactics that are apparent to this reviewer. There are also no complaints regarding the company’s sales tactics to be found on this or other consumer protection websites, indicating that there are no issues with hidden fees or rate increases. Dwolla’s recent reduction of its per-transaction pricing to completely free further reduces the risk of deception. Given Dwolla’s simple pricing plan and clear disclosure of its fees, we have assigned it an “A+” rating in this category.
Dwolla Marketing Example
|Key Points – Costs & Contract Terms|
|PCI compliance fee:||None|
Dwolla probably has the most attractive pricing of any electronic payment service on the market. Prior to June 2015, Dwolla charged only 25 cents per transaction for any amount over $10, but it appears to have eliminated this fee. The company currently allows users to send and receive money using its network for free. There are no additional fees whatsoever (including no PCI Compliance fees) and no service agreement or cancellation fees.
For merchants who require additional features, Dwolla offers plans that charge a flat monthly fee with no transaction fees. The company’s Plus plan starts at $25 per month, its Premium plan starts at $250 per month, and its Custom plan starts at $1,500 per month. Each plan adds new features like next day transfers, priority support, higher transaction limits, and white label options. Overall, these rates are extremely competitive considering the company’s free processing platform.
|Key Points – Complaints & Service|
|Live customer support?||No|
|Most common complaint:||Transfer time|
Dwolla has only about 20 complaints filed in the usual online forums, including Ripoff Report and the comments section of this review; however, the content of these complaints appears to describe isolated incidents and simple merchant misunderstandings surrounding the $3.00 monthly fee for Dwolla Instant (an opt-in service that offers up to $500 in instantly transferrable cash). This $3.00 fee is clearly disclosed on the Dwolla website and will not be considered deceptive for the purposes of this review. Other complaints describe technical issues or inadequate support, but they do not indicate a consistent or severe problem with Dwolla’s service. The company provides email support and help articles published on its website.
Related: Best All-in-One E-Commerce Platforms
|Key Points – BBB Report|
As of this review, the Better Business Bureau is showing Dwolla as not “BBB Accredited” and is assigning the company an “B+“ rating based on nine complaints filed in the last 36 months. Of the complaints, six are due to problems with service, one is related to billing and collection, and one has to do with an advertising or sales issue. Three complaints were resolved to the customer’s satisfaction, while the remaining six either were resolved to the customer’s dissatisfaction or did not receive a final assessment from the customer. In light of these figures, we have slightly adjusted the BBB’s grade to an “A-.”
* Denotes CPO-adjusted BBB score
This review was originally published on 2/8/12 and was last updated on 6/26/15.
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