Dwolla is arguably the most dynamic online payment services platform which simplifies all complexities associated with the ACH network. This payment solution is exclusively meant for businesses looking to use bank transfers as a more cost effective payment method and delightful payment experience for their users. The Dwolla Platform comes with an easy-to-use dashboard and flexible suite of features for an API integration.
Many businesses have touted Dwolla as the ideal API to move money by disbursing payouts or integrating P2P transfers within a user’s platform. It is neither a third-party processor nor a merchant account provider.
Read our review of Dwolla’s payment platform. If you have any experience or questions with Dwolla (particularly recently), we would love to hear your thoughts.
Dwolla uses a pretty straightforward concept: ACH payments. You will not find crypto-currency, card acceptance, PayPal or other online payment alternatives. Dwolla is incredibly versatile when it comes to ACH payments and it is created on a developer-friendly platform. Besides accepting payments, here is what an integration with Dwolla’s ACH payment API could do for your business:
- Receive payments
- Send payments
- Facilitate payments
You’re probably wondering what “facilitate payments” means. It simply implies that you could create an application that lets users send funds to each other without you (the merchant) touching the funds. In addition, the facilitation model allows businesses to easily take a portion (e.g. percentage or fee) of the payment being transferred between users. n.
1. User Accounts
One aspect about this platform you won’t experience with many credit card processors is the requirement for end users to verify their bank accounts. There are two options to verify your bank account: Instant Account Verification and micro-deposits. IAV requires a user to log in to their online banking account via a secure window. Micro-deposits send a small amount of money to your bank to verify the information. Micro-deposits take longer to set up and clear, but the verification method you offer your end users is entirely at your discretion.
Dwolla separates its user accounts into three types: Receive-only, Verified, and Unverified. A ‘Receive-only’ user only needs to provide minimal information and as a result, can only receives payouts. This user isn’t required to go through any verification process and can’t hold a balance within their account.
Customers classified as ‘Unverified’ can receive and send funds, cannot hold funds within their account, and have a dollar limit on the transfers–$5,000 a week. This customer type is only required to provide their name and email address, in addition to having one party within an ACH transaction to be fully verified.
Fully ‘Verified’ accounts fall into two groups: personal and business. A verified personal account is limited to $5,000 per send while a business account is limited to $10,000 per transaction. Although a fully ‘verified’ user requires a bit more information to be verified, it has the ability to hold a balance, send and receive funds, as well as have access to additional payment functionality not offered to all other end users.
This is Dwolla’s DNA and they practice iterative security, meaning that they evolve with technology and risks by focusing on people, culture and the platform. They maintain compliance with the SOC 2 framework that gives an independent, third-party assurance that they’re taking the right steps to protect their systems and your data.
The second way (which we were particularly impressed with) is tokenization. Instead of sending actual account numbers, the data is encrypted and replaced with a different number before it’s sent over the network. Tokens usually have limited use so even when they are intercepted, they can’t be used again. Many online credit card processors and POS systems are already implementing tokenization as well so Dwolla applying this approach is a sign of mature security practices.
3. Integrations and Add-Ons
As far as integrations are concerned, we are happy to report that Dwolla is technology-agnostic and blends well with other services you might want to incorporate. However, it does not have a list of any ready-made integrations you can choose from, and this makes us believe everything is custom built. However, Dwolla mentions two out-of-the-box integrations: Sift Science and Plaid, both of which are cool for large enterprises looking to bolster their integration payment integration.
The Plaid integration allows businesses to quickly verify users’ bank accounts through tokenization with the Dwolla platform. In addition, all of the user data is stored within their systems and not yours, which is a value add.
Sift Science, on the other hand, is a fraud-monitoring platform analyzes its machine learning as well as knowledge about past transactions to evaluate every transaction and assess its probability of being fraudulent or suspicious.
4. Fees and Rates
Dwolla gives three pricing plans: Start, Scale, and Enterprise. The start pricing plan uses a pay-per-transaction model, Scale uses structured, predictable fees, while Enterprise is entirely custom. The Start plan is still not widely available since it’s still in beta.
- Start (Beta)
Businesses that want a pay-per-transaction API integration can leverage this plan. It has no monthly fee, charges a fee of 0.5% per transaction, and has a $0.5 minimum and $5 maximum. However, it comes with several limitations; you cannot access specific features (like same-day deposits, on-demand payments, facilitating payments and balance holds). There’s also limited customer support with this plan – no Slack access or phone, no dedicated account rep, and no integration engineer to provide support.
- Scale Plan
Companies looking to implement a payments integration which works for businesses launching and growing could leverage this pricing plan. This plan has a flat per month fee that is consistent and not based on a per transaction charge. With this plan, you’ll pay for more than just ACH transfers. You receive a full-service package with extra features. Besides having a dedicated customer support representative, you will also receive integration assistance from Dwolla so that you can quickly implement your payments system easily, in addition to direct ongoing support from a team of developer advocates.
Other features available on this plan but not its predecessor include the ability to hold funds within the account and establish verified customer accounts. You can also access same-day and next-day ACH transfers, though this is at an extra cost.
- Enterprise Plan
Business looking for custom solutions from a sophisticated payments partner could use this plan. With this plan, you get custom pricing in addition to all the features of the Scale plan. A few extra perks that come with this plan include and opportunity for information security support and technical support, in addition to prioritized assistance and dedicated support.
5. Additional Fees
Fortunately, Dwolla doesn’t have many built-in account fees or hidden fees. Their expedited payment processing shouldn’t be a surprise considering ACH typically takes 3-5 days. The additional fees are seen with payment returns, higher transaction limits , which is mentioned in their terms of service.
6. Transaction Limits
We were impressed by the fact that Dwolla is upfront about the transaction limits, with the information stipulated clearly in their terms of service.
7. Customer Service and Tech Support
Dwolla provides nice, friendly customer support and they lived up to that. If you are on the Start plan, you’ll have limited customer support options – email and developer forum. With the Scale and Enterprise plans, however, Dwolla surprisingly bends over backwards for their customers, with a dedicated account manager and access to an integration engineer. Some of the support options at your disposal include email support, phone support, developer forum, and dedicated collaboration channel.
Unfortunately, the do not support post support hours, probably because of the company size. But, they offer developer guides and documentation which are fairly thorough and a reliable judge of their quality. Given the quality of support offered, I’m sure if there was an outside of hours payments, issue someone would be online to assist.
Dwolla is an interesting and niche platform. Although it isn’t super advanced from the standpoint of variety of payment types, it has just enough features to stand out among other ACH payment platforms. Although we were impressed by its pricing model, it feels as if they are after the big guns – high-value, elite clients. This, however, isn’t a reason to cross Dwolla off your ACH platforms list. Exploring the customer stories on their website tell us that Dwolla would be a solid solution for businesses looking to grow. If you think it is a good solution (like we do), we encourage that you explore it.