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Dwolla Credit Card Processing 2023: Reviews & Complaints
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Dwolla is a Des Moines, Iowa-based startup that was founded in 2008 on the premise of bypassing credit card interchange fees (a.k.a. swipe fees) and providing a low-cost payment service to businesses and consumers. Dwolla created a proprietary payment network similar to that of VISA and MasterCard, but Dwolla’s network does not charge a fee for each transaction like a traditional merchant account does. Instead, the company eliminated 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 was, but Dwolla approached the concept from a very different angle.
Before we dive in, here’s a short summary of what we’ll cover:
- Dwolla’s various payment processing services.
- Dwolla was formerly a good alternative to traditional processors but has shifted its focus to B2B and marketplace payments.
Dwolla Payment Processing
Although Dwolla’s use of ACH transfers was not exactly a new idea, its marketing and business strategy was completely unique. With help from a few banking and financial institution investors, Dwolla created a payment network that eliminated all of the common fees that clients incur from accepting card payments. Additionally, the company’s network eliminated the common transfer delays and fraud that plagues similar networks such as the ACH network that most banks utilize. Essentially, Dwolla created a global system for free, instant cash transfers.
Real-Time Payments and Transfers
One of Dwolla’s standout services is the provision for real-time payments. Unlike traditional ACH payments that may take days, Dwolla’s real-time service promises much quicker transfers.
Dwolla provides white-label solutions, enabling businesses to integrate Dwolla’s payment functionalities under their own branding. This is particularly beneficial for companies looking to offer seamless payment experiences without redirecting to third-party platforms.
Bank Verification Services
Dwolla offers a bank verification service that expedites the process of linking a bank account to the platform. This is a crucial feature for businesses and individuals who cannot afford any delays in processing transactions.
With Dwolla’s mass payout feature, businesses can make multiple payments at once. This is useful for organizations that need to manage payroll or distribute funds to various vendors in one batch.
Dwolla places a high emphasis on security, offering features like multi-factor authentication and tokenization to safeguard transactions and sensitive data.
Dwolla offers a robust API that developers can use to customize their payment solutions. Documentation is available, making it easier for businesses to integrate Dwolla into their existing systems.
Dwolla also assists businesses in complying with various regulations related to electronic payments. They offer consultation services to ensure that businesses adhere to legal guidelines when processing transactions.
For businesses that operate on a subscription model, Dwolla offers features that enable recurring billing. This makes it easier to manage customer subscriptions and automate billing cycles.
Shift to B2B and Marketplace Platforms
In the past two years, Dwolla has shifted its marketing to emphasize its mass payout API for marketplace-style and business-to-business payments. In fact, it is no longer offering the customer-facing payment product that competed directly with traditional payment processors. As a result, most consumers and businesses will now only encounter Dwolla as the default payment processing platform integrated into an online product or service. We have continued covering the company because it remains a large player in the digital payments sector, but it is no longer a direct competitor of standard credit card processors.
Dwolla has introduced a new API solution called Dwolla Connect, aimed at mid- to enterprise-level businesses. This service enables simplified payment initiation from major U.S. banks such as JPMorgan Chase & Co. and Wells Fargo. Dwolla Connect expands on the company’s digital wallet product, Dwolla Balance, and offers a new avenue in the account-to-account (A2A) payment sector. It is designed to be bank-agnostic, eliminating the need for multiple bank integrations and simplifying treasury management. The service caters to diverse industries including financial services, lending, and insurance.
Location & Ownership
Dwolla is headquartered at 909 Locust St #201, Des Moines, Iowa 50309. Dwolla states that it is “an agent of Veridian Credit Union” and that “all funds associated with your account in our network are held in one or more pooled accounts at Veridian Credit Union.” Dave Glaser is the CEO of Dwolla. Ben Milne and Brady Harris are former CEOs of Dwolla.
Table of Contents
- Costs & Contract: Offers custom pricing for most accounts but has…
- Complaints & Service: Has received more than…
- BBB Rating: Has an “A+” with the…
- Sales & Marketing: Does not appear to hire independent sales representatives and has…
Dwolla Customer Reviews
Here's What Their Clients Say
|Total Online Complaints||50+|
|Live Customer Support||No|
|Most Common Complaint||Slow Transfers|
Moderate Complaint Total
There are more than 50 negative Dwolla reviews filed in the usual online forums, including Ripoff Report and the comment section of this review; however, a good number of these complaints appear to describe isolated incidents and simple client misunderstandings surrounding the $3.00 monthly fee for Dwolla Instant (an older service that offers up to $500 in instantly transferrable cash). Other, more recent complaints describe technical issues, slow fund transfers, or inadequate support, but they do not indicate a consistent or severe problem with Dwolla’s service. If you have your own Dwolla review to make, please do so in the comments below.
In March of 2016, the Consumer Financial Protection Bureau took action against Dwolla for deceptive practices regarding its data security policies. The company was ordered to pay $100,000 for falsely claiming its data security policies surpassed industry standards through encryption.
Dwolla Customer Support Options
Dwolla only provides forum support to its “Start” users but extends email support, phone support, a dedicated Slack channel, dedicated customer support, and integration support to clients above the “Start” tier. These additional options are competitive with even the top-rated payment processors for great customer service, but clients under the Start plan are likely to find that offering inadequate. Dwolla only offers live chat to non-customers, and other customer service options are not advertised publicly.
Dwolla Online Ratings
Here's How They Rate Online
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
Under 5 Complaints
The BBB shows Dwolla as not “BBB Accredited” and assigns the company an “A+” rating based on 4 complaints filed in the last 36 months. 0 complaints were resolved to the customer’s satisfaction, with all complaints either resolved to the customer’s dissatisfaction or not receiving a final assessment from the customer.
What Merchants Say
Dwolla has also received 2 negative informal reviews to its BBB profile. The most recent review describes issues with a transaction:
Earnest money for purchase of home through Dwolla client Berkshire Hathaway submitted. Transactions was not consummated. Earnest money refunded in full. Multiple requests for completion of 1099 K. This is not income. Customer service unable to compute that $10,000 submitted, less $10,000 refunded equals zero.
A “B” Performance
In light of these figures, we have slightly adjusted the BBB’s grade to a “B.”
Dwolla Fees, Rates & Costs
A Closer Look at The Contract
|Monthly & Annual Fees||Depends on Plan|
|Processing Rates||0.5% Per Transaction|
Dwolla’s Former Pricing Model
Prior to its shift in focus, Dwolla probably had the most attractive pricing of any electronic payment service on the market. Before June 2015, Dwolla charged only 25 cents per transaction for any amount over $10. The last time its standard pricing was visible, the company allowed users to send and receive money using its network for free. There were no additional fees whatsoever (including no PCI Compliance fees) and no service agreement or cancellation fees. For businesses that required additional features, Dwolla offered plans that charged a flat monthly fee with no transaction fees. The company’s Plus Plan started at $25 per month, its Premium Plan started at $250 per month, and its Custom Plan started at $1,500 per month. Each plan added new features like next-day transfers, priority support, higher transaction limits, and white-label options.
Dwolla’s Current Pricing Model
Today, Dwolla offers four pricing plans for enterprise-level businesses and payment platforms. The company’s Start Plan is a pay-as-you-go option with no monthly fee and a fee of 0.5% per transaction with a minimum of $0.05 and a maximum of $5.00. This plan does not come with payment facilitation tools or any customer support beyond forum support. The Scale Plan costs $2,000 per month but includes the tools necessary to operate a payments platform as well as added customer support. The Launch plan is halfway between the pay-as-you-go and Scale Plan. There is also a custom pricing plan with the full suite of Dwolla features.
Competitive for Its Target Market
Overall, the company’s previously advertised pricing was extremely competitive, but its current pricing is designed mostly for payment platforms and enterprise-scale businesses. Some standard clients have complained that the company’s new business model has left them behind, but we have not seen any complaints posted by businesses within Dwolla’s target market. We will therefore assign the company an “A” in this category.
Dwolla Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Uses Independent Resellers||No|
|Discloses All Important Terms||No|
In-House Sales Team
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 negative Dwolla reviews regarding the company’s sales tactics to be found on this or other consumer protection websites, which indicates that there are no issues with hidden fees or rate increases. Dwolla has replaced its flat and free pricing options with a custom rate quote now that it focuses on platform-scale payments, but we have not found complaints about these custom pricing plans.
Solid Track Record
Given Dwolla’s history of transparency and the lack of sales-related complaints, we have assigned it an “A” rating in this category. If you suspect, however, that the company has misled you about its pricing, you can get a professional analysis with a third-party statement audit.
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