BBVA Compass has announced an agreement that opens its technology platform to payments innovator Dwolla, allowing customers of the bank to use the Iowa startup’s real-time network to make money transfers.
The deal makes BBVA Compass the largest bank to partner with Dwolla, a nimble alternative to the current payments networks that are decades old in some cases, far from real-time, and more expensive to use. It also makes BBVA Compass the only major bank to open its platform, at this extent, to digital developers like Dwolla, its first such move inspired by the open standards that pushed forward other industries. BBVA Compass sees the agreement as indispensable and timely given its transformation to a digital bank amid rapidly changing consumer habits.
The partnership will allow for BBVA Compass account holders, in the first quarter of 2015, to make real-time payments to each other in a way that's safe and as fast, direct, and transparent as email. Dwolla’s proprietary architecture and tools allow any business, organization or individual with a U.S. bank account to move money at a cost that cannot be matched by traditional networks (transactions more than $10 cost a flat fee of 25 cents, while anything less is free).
In the first stage of the agreement, BBVA Compass will use Dwolla’s FiSync protocol, designed especially for banks and credit unions, to move funds for BBVA Compass customers to anyone through Dwolla's real-time network. This will be particularly useful for startups, enterprises, and small businesses looking for a quick, inexpensive way to handle disbursements or B2B payments, among other things. BBVA Compass and Dwolla will continue to roll out additional features and updates in the subsequent months.
With venture backers like Andreessen Horowitz and Union Square Ventures, as well as strategic investors like CME Group, Dwolla is looking to help transform payments and money movement, and is partnering with forward-thinking financial institutions to realize the vision. Back in 2012, BBVA Compass invested $362 million in a technology platform that allows for real-time banking.