September 22, 2015
Dwolla, the US-based payment processor, has expanded its Dwolla Credit services. The user can now instantly transfer the money to its friends and family. This new deal is being executed by Dwolla in partnership with Comenity Capital Bank. The users can simply type in their email address, phone number, or eligible business followed by choosing credit as the funding source.
Originally founded in June 2008, Dwolla was launched in the US on December 1, 2009 by Ben Milne and Shane Neuerburg as founders in Des Moines, Iowa. It is an independent payment network that allows companies and individuals to pay each other directly. This avoids the high fees of money transfers, bank payments and credit cards.
Initially the company used to charge a flat 25-cent fee for all transactions, and there was no fee for any transaction under $10. But now the company has changed its pricing strategy. As of now, its $0.25 per transaction fee has been removed, for everyone, for every type of transaction.
As mentioned in company’s blog, the newly launched credit service will allow individuals instant access to funds, bypassing the traditional three to four business day wait time associated with bank-funded transfers into your Dwolla account. Simply use what you need and pay off your balance by the payment due date on your monthly billing statement.
The users can send up to $500 in a single transfer to another Dwolla user or email address. The company has set a monthly limit of $3,000 per user. There is no activation or transaction fee associated with the transactions made by the user.
Dwolla’s major competitors are PayPal, Revolution Money, Square, Obopay, OpenCuro Inc., Visa, PayNearMe, Google wallet, Stripe, Popmoney, etc.
Dwolla’s competitive edge has been its pricing and ease of use. Its unique business model—people, businesses, governments, nonprofits, and developers exchange money without paying a percentage to big brand payments companies. Dwolla is able to make this business model scale and sustain through tie-ups with government agencies, businesses. The company has been able to sustain and grow its user base, with the transformation from paper money to electronic payments.