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When Dwolla Inc. in June eliminated its 25-cent transaction fee, it said it intended to make money by launching value-added services that would leverage the network technology it had created. On Wednesday, it launched the latest chapter in this plan with a white-label service that lets banks, businesses, and government agencies send payouts to users or customers. The new service uses Dwolla’s application programming interface (API) but lets the sending entities brand it with their own names.
The launch will allow financial institutions and other entities to access the automated clearing house network for payouts, but with the overlay of Dwolla’s fraud-monitoring capability, customer ID programs, and communications links. Banks using the new service will also be able to offer real-time payments using Dwolla’s FiSync technology.
These capabilities, such as FiSync, have been available to banks and businesses for some time, but have been branded by Dwolla. FiSync, for example, in April scored its biggest banking coup so far when Houston-based BBVA Compass Bank turned on the switch to enable real-time, tokenized payments.
“This is a release of white-label [services] for the first time ever [by Dwolla],” notes Jordan Lampe, builder at the 7-year-old, Des Moines, Iowa-based company. “Businesses, financial institutions, and government [agencies] can use our infrastructure to access the U.S. financial system to move money without the Dwolla brand getting involved.”
With Wednesday’s release, clients could enable payouts for marketplaces, to reimburse employees for expenses, or to pay drivers in car-sharing services, for example.
Lampe says seven clients have signed on so far, though he can’t name them or talk about the applications they are planning to introduce. Now, though, he expects demand to climb rapidly. “The ACH wasn’t built to cater to a 21st-century payments-as-a-service platform,” he tells Digital Transactions News.
Specifically, the new release consists of four so-called API endpoints. These include functions for creating a customer record, adding a funding source, and sending funds. They also include Web hooks, or “listening” tools that work with the Dwolla network to check the status of transactions and confirm settlement.
The white-label service comes with a price tag of $1,500 per month, though the price remains flat regardless of transaction volume.
