Authentication & Security

Dwolla Submits Its Real-Time Payments Proposal to the Federal Reserve's Faster Payments Task Force

Real-time pioneer opens up on FiSync, elaborates on its vision as part of Faster Payments Task Force proposal process

DES MOINES--Dwolla, an all-digital bank transfer payment system, announced today that it submitted a faster payments proposal to the Federal Reserve-chartered Faster Payment Task Force for review and assessment. The Fed-chartered initiative, comprised of the over 500 Faster and Secure Payments Task Force members, has been tasked with representing, addressing, and assessing improved payments systems. The Dwolla proposal offers an alternative to the 40-year-old $40-trillion bank transfer system that can take up to four days to transfer funds.

“The success of the Fed’s initiative represents an unprecedented awareness of the potential returns offered by a more secure, modern, and instantaneous payment system,” said Dwolla CEO and Founder Ben Milne on Dwolla's blog. “The submission reveals how FiSync works today and could work tomorrow. It's a powerful way to strengthen market fit, collaborate with other platforms, and accelerate adoption in the emerging faster payment market.”

Dwolla Submits Its Real-Time Payments Proposal to the Federal Reserve's Faster Payments Task Force

Since 2012, financial institutions (FIs) have enabled real-time transfers using FiSync, a specialized communication and interoperability protocol for banks and credit unions. The system ensures availability of good funds via a credit push model, executes real-time transfers in seconds—not days, and extends faster payment services and capabilities to nearly any device, platform, or use case.

Key benefits of the proposed solution

The faster payment proposal expounds on the capabilities and services of Dwolla’s existing FiSync platform to offer a seamless, comprehensive faster payments solution.

Future-proof, interoperable: Will be agnostic to settlement path, operator, existing banking system, and standards to help ensure compatibility with FIs, today and tomorrow

Access and monetization: Accounts for API access via FIs to enable faster payment system access, capabilities, and services with platforms and applications; and/or build new revenue streams or improve existing products and services at the FI (e.g., the ability to append additional metadata to a transaction).

Data Protection: Strong standards-based cryptography will ensure message integrity, enforced Transport Layer Security (TLS) will protect data in transit and Authenticated Encryption will protect data at rest.

Additionally, proposed system components will enable pre-authorizations, on-boarding on first use, and fraud sharing while deterring fragmentation and promoting secure interoperability. Governance suggestions in the proposal layout a payment landscape that ensures and promotes interoperability, access, inclusion and specialization.

The Faster Payments Task Force

The Federal Reserve’s “Strategies for Improving the US Payment System” established the Faster Payments Task Force in support of its strategy to identify effective approach(es) for implementing a safe, ubiquitous, faster payments capability in the United States. The Faster Payments Task Force objectives are to:

  • Represent views on future needs for a safe, ubiquitous faster payments solution
  • Assess alternative approach(es) for faster payment capabilities
  • Address other issues deemed important to the successful development of effective approaches

The proposal process allows task force members to submit comprehensive faster payment solution proposals to be analyzed using 36 effectiveness criteria identified by the task force. Both the proposals and assessments will be provided to the full task force later this year for review and comment, prior to their publication in early 2017. For more information, visit https://fedpaymentsimprovement.org.

About Dwolla:

Dwolla provides a real-time communication and interoperability network and platform for bank transfers. Using its real-time ledger, directory and settlement infrastructure, the network connects to financial institutions to move US dollars through its own instant bank transfer rails, FiSync, or existing systems, like ACH or wire. It's branded and white label APIs allow individuals, businesses, software platforms, financial institutions, federal agencies—anyone in the US—to simply and securely leverage Dwolla’s capabilities and the US payment system to send and receive funds, without the transaction fees and heavy costs of integrating with traditional systems. Dwolla has raised over $30 million from CME Group, Andreessen Horowitz, Union Square Ventures, et al and is based in Des Moines, Iowa. Learn more at https://www.dwolla.com.

Ben Milne

Ben Milne is the Founder and CEO of Dwolla, a payments startup building the ideal way to move money. Under Ben, the Des Moines-based company has raised over $32 million from investors like Andreessen Horowitz and Union Square Ventures, and has been recognized by Fast Company as one of the worlds “50 Most Innovative Companies of 2014.” Ben has been named as one of Forbes “Disruptors of the Year” and has appeared on Inc. Magazines in its annual 30 Under 30 collection, Bloomberg TV, and The TODAY Show. In 2013, he was recognized for his work by MIT Technology Review in its annual “Innovators Under 35” list.

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