BBVA Compass has Partnered with Dwolla to bring in Real-Time Banking

BBVA Compass recently announced that it has entered into an agreement with Dwolla, as part of which, it will open its technology platform to Dwolla. The agreement would allow customers of the bank to leverage Dwolla’s real-time network for money transfers. The recent agreement comes at a time when BBVA Compass is already trying to transform itself into a digital bank, keeping up with changing banking customer behavior.

The deal makes BBVA Compass the biggest bank yet to partner with Dwolla. It is also the only major bank to have opened up its platform to such an extent to digital developers. The real-time payment services would be available to BBVA Compass account holders probably in Q1 2015. Dwolla’s architecture and tools allows any organization, business or individual with a U.S. account to transfer money at a very competitive price. Dwolla charges a flat fee of 25 cents for transactions for amounts of $10 or more.

Manolo Sanchez, Chairman and CEO of BBVA Compass, said in an official press release: 'We've set our minds on being the best bank in this digital century, and we believe strongly that the best way to get there is to combine our in-house capabilities — our real-time core banking platform, for one — with startups whose very existence is designed to redefine the financial services industry. Dwolla, and its real-time payment infrastructure, is leading the modernization of the payment process, and we expect their technology to accelerate our own vision for banking in the digital age.'

During the early phases, BBVA Compass will leverage Dwolla’s FiSync protocol to enable funds transfers through Dwolla’s real-time network. The protocol has been specially designed for banks and credit unions. The use of this protocol would deem useful for startups, enterprise companies and small businesses that are seeking quick and inexpensive ways to handle B2B payments. In later phases, additional features and updates would be rolled out.

Ben Milne, CEO and Founder of Dwolla, said in an official press release: 'As new technologies push the limitations of the existing batch payment infrastructure and federal level initiatives champion the call for real-time payments, it's the financial institutions that are working to bring true streaming payments to their clients, today, that will have the competitive advantage tomorrow. BBVA Compass shares Dwolla's vision for a modern payment infrastructure — one that helps financial institutions and their account holders create new products and services, streamline and improve business processes, and stay relevant in an increasingly digital and customer-centric landscape.'

Banks in the U.S. usually rely on the Automated Clearing House or ACH for money transfers. ACH can take days to transfer money between two accounts at different banks. It also imposes fees of 15 to 95 cents per transaction which is higher than that of Dwolla. With its biggest deal yet with a major bank, Dwolla is disrupting the payments space by becoming a prominent challenger to traditional routes like ACH. If other banks start following in the footsteps of BBVA Compass, we may witness a radical transition in the banking sector.