Dwolla, the Iowa based company founded in 2008 and launched in the U.S. in December 2009, is a cash based network that relies on a bank account based payments.
For individuals, Dwolla provides a convenient, paperless and quick way to pay friends or businesses. Using either Dwolla’s website or mobile application, individuals can send money via email, phone (SMS), Facebook, LinkedIn or even Twitter. Payments are easy – no more paper checks, quick – payment is immediate and you’re not waiting for a check to arrive in the email, and cost-effective – Dwolla charges just $.25 for each transaction $10 or over and transactions under $10 are free.
For businesses, Dwolla offers significant cost savings by eliminating the physical processing of paper check payments and, if customers switch from credit card payments to Dwolla, the business will also save on credit card processing fees, especially for larger payments as Dwolla charges only $.25 per transaction for anything over $10 regardless of the total amount.
In 2011, the company introduced its open API, Grid, which allows direct connection with other platforms and applications. The company followed up with the launch of FiSync in June 2012, offering financial institutions and financial service providers the opportunity to provide real-time bank transfers for the same price as ACH.
This past January, Dwolla was again in the news, when the state of Iowa announced that they would begin accepting some tax payments via the payment application.