Dwolla Shakes Up Online Payments - InformationWeek
IoT
IoT
Cloud // Platform as a Service
News
11/30/2012
11:29 AM
Connect Directly
Facebook
Google+
LinkedIn
Twitter
RSS
E-Mail
50%
50%
RELATED EVENTS
IP Intelligence: The Utility Player for Your Online Business
Aug 31, 2017
Join us as we explore the many benefits of IP Intelligence, and how you can use IPI to improve you ...Read More>>

Dwolla Shakes Up Online Payments

Online payment darling Dwolla adds three new services as it tries to speed up merchant and consumer acceptance of its electronic transactions.

Dwolla, a startup in the online payments markets, announced three new services Friday that it hopes will accelerate both merchant and consumer acceptance of Dwolla transactions, one of the big barriers that all payment startups -- and frankly, anyone offering anything other than credit cards or cash -- face; and that includes mobile wallets.

The three new services include a Dwolla guest checkout service, where customers can pay without having a Dwolla account and Dwolla Price, where merchants, thanks to the money they'll save on credit card fees, can choose to pass some of that saving back to customers as a way to entice them to use the Dwolla service -- in other words, the merchant and the customer save. It also introduced new point-of-sale system integrations (Dwolla's new partners include ShopKeep and Change) that let the merchant initiate a payment using a push notification to the customer's phone.

But maybe it makes sense to provide a little more context about Dwolla. As it happens, we just had Dwolla's CEO Ben Milne on InformationWeek's Valley View, a monthly, live Web TV show on Wednesday (the video from that segment is embedded further below).

What is a Dwolla?

Little Dwolla, barely two years old, with all of about 40 employees in the technology hotbed of Iowa, has big intentions. It has created a modern payment network, and it aims to change how money moves and to upset what Dwolla CEO Ben Milne thinks is a costly, inefficient, fraud-riddled payments model.

Dwolla has largely been viewed as a PayPal competitor, or a mobile wallet, the de facto ways to facilitate peer-to-peer payments, or consumer-to-merchant payments. But Milne says that these systems are merely building on top of the existing credit card network, and thus simply add to the cost of maintaining those networks. Companies like PayPal, Stripe and Square may aggregate, or process transactions on behalf of all of the traditional components of the payment ecosystem, but each step still extracts its fee on every dollar the network settles, says Jordan Lampe, who heads up communications for Dwolla.

Dwolla

Instead, Dwolla is the network. The company's APIs expose the Dwolla infrastructure for banks, merchants and others to move money, arguably more cheaply and efficiently.

While the early focus in mobile and online commerce has been the typical customer-merchant transaction, Milne says the barrier to entry there is high. Not only must the customer want to use Dwolla, rather than a credit or debit card or cash, the merchant has to accept Dwolla as an option. Dwolla has built several easy ways for merchants to offer Dwolla payments through a kiosk, online, via e-commerce shopping cart extensions, through a merchant mobile app or even on some point-of-sale systems. But it is slow going. And to some extent, this is where the aforementioned three new services come into play. Even though the barriers to entry may be high, it doesn't mean Dwolla is giving up the fight; it's just arming itself for a long battle.

Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
QDTruong
50%
50%
QDTruong,
User Rank: Apprentice
4/18/2013 | 6:52:08 PM
re: Dwolla Shakes Up Online Payments
I think Dwolla has the real potential to be a game changer....check out this blog and Dwolla Infographic if you're interested in reading more.
Byurcan
50%
50%
Byurcan,
User Rank: Apprentice
12/3/2012 | 3:56:49 PM
re: Dwolla Shakes Up Online Payments
The barrier to entry in the mobile/online payments space is indeed high, interesting to hear from Dwolla their strategy, specifically creating its own payments network.
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
IT Strategies to Conquer the Cloud
Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll