Dwolla how does it work

Are you looking for the best or cheapest way to accept ACH bank transfers? Take a look at our post about ACH payment processing. What is Dwolla, and how does it work? Just pure, simple bank transfers. So how does Dwolla handle ACH transfers? You can think of it as something akin to a digital wallet such as Venmo or CashApp but scaled for B2B payments rather than P2P transactions.

Stripe or Dwolla vs. Dwolla, however, offers a unique platform based entirely around ACH payments. This should provide growing businesses that process a lot of transactions with more ability to scale within the Dwolla ecosystem.

Wire transfers and pushing payments directly to debit are also available at the higher tiers. The Launch plan is where the full feature set of Dwolla starts to kick in, granting you ability to process ACH payments more quickly, send payments directly to debit cards, send and receive wire payments, and utilize the RTP Real-Time Payment Network, a high-speed bank-to-bank alternative to ACH. At this price point, your ACH transactions are now included in your monthly fee and dedicated customer support is included.

The Scale plan requires an annual commitment. If you sign up for the Scale or Enterprise plans, however, things are different. Agreements are typically for an initial term of twelve or 24 months. Customer service options with Dwolla range from barely adequate to top-notch, depending on which pricing plan you sign up for.

Dwolla, however, makes it official. User feedback on Dwolla from across the internet is mixed but generally positive. The company also provides some testimonials and case studies on its website that provide good examples of how users have leveraged the Dwolla platform to their benefit.

The company has had four complaints over the past three years, two of which were filed within the last twelve months. This is a notable drop in complaint volume from our previous review update when the company had nine BBB complaints.

There are also four reviews posted, all of them awarding either one or two stars out of five. The majority of these complaints and reviews were filed by customers, rather than merchants, who were asked to use Dwolla and ran into problems.

As is so often the case in the payments processing industry, just about the only positive feedback on Dwolla comes from the company itself. For now, Dwolla earns an overall score of 4 out of 5 stars. Visit Site. After hours of in-depth research and evaluation, we can confidently recommend this brand to our readers. Pure, simple, bank transfers. That said, Dwolla is actually quite versatile when it comes to this type of payments, and is based on a platform easy to use for developers.

This is what you can do with money:. Dwolla offers two options to do this:. A couple of additional features with Dwolla are recurring payments and on-demand payments. Recurring payments are quite obvious: a subscription management tool in which your customers pay the same amount each month.

On-demand payments work with metered billing so you can charge a variable amount each month depending on usage. Dwolla helps keep transactions secure in several ways: first, you can implement Dwolla. Second, Dwolla also offers tokenization. Instead of transmitting real account numbers, the data is encrypted and replaced with another number before being sent over the network.

Tokens have limited use and therefore, even if they are intercepted, they cannot be reused. Many POS systems and even some online credit card processors have also begun to implement tokenization.

As for integrations, Dwolla says they are agnostic to technology and work well with other services you want to integrate. However, Dwolla mentions two ready-to-use integrations:. Dwolla technically offers three pricing plans: Start a pay-per-use model that will be available from , Scale structured and predictable rates and Enterprise fully customized.

The Start plan is still in beta, so it is not widely available. This will be the option that will attract merchants who want to process transactions directly.

Merchants in this plan also get more limited customer service : there is no phone or slack contact, and there is no dedicated account representative or integration engineer for support. However, we know that the monthly fee is consistent and is not based on the number of transactions processed in a given month.

You should keep in mind that you are paying for more than transfers. This can be an option if you operate a business where it makes sense to accept payment via bank transfer. To understand what Dwolla does, it helps to understand what ACH payments are.

In short, ACH payments are electronic payments between banks. ACH payments are an alternative to paying with cash, credit, debit or checks. ACH is a U. Examples of ACH payments include paying friends via Venmo, purchasing an item using PayPal, paying your utility bill online or your employer depositing wages directly into your bank account. What Dwolla is selling is the ability for your business to integrate with the ACH network.

Use cases include real estate investors who want a way to electronically receive rent payments from tenants, utility providers, wealth management businesses and reimbursement services. ACH payments are also easier to accept because bank account numbers change far less frequently than credit card numbers.

Dwolla makes it possible to send, receive and facilitate ACH payments. On its website, Dwolla offers an array of documentation that explains how you can integrate your software with its API application programming interface.

The company also offers a sandbox programming testing environment so you can test to see how your software will work with Dwolla before integrating it. For those without programming experience, Dwolla provides one-on-one assistance with integrating your platform into its software. Once you are all set up, you can enjoy a range of features, including:.

When you set up a business account with Dwolla and receive verification, you will be able to hold funds in your Dwolla account received from payments, much like a digital wallet. You can use funds held in your account to make other payments or transfer them to a business bank account or a personal savings account.

You can even use your Dwolla account to transfer funds from one bank account to another. Unlike credit transactions, customers who wish to pay you via Dwolla must verify their account. This adds an extra layer of security for you. For customers and merchants alike, Dwolla offers two verification processes: instant account verification and micro-deposits.

Note that you can still send and receive money with Dwolla without verifying your account. Unverified users cannot hold a balance in their digital wallet and can only send and receive funds from a verified user.

Verified users have the option of selecting a business account or a personal account. In addition, merchants can arrange for these scheduled payments to be recurring. This is ideal for collecting rent or subscription fees. Dwolla also has a metered billing option, allowing it to charge a different amount for each scheduled payment based on customer usage — perfect for utility billing.

Dwolla does not specify third-party products it integrates with on its website. However, it does promote two in-house products that can extend the functionality of your platform: Plaid and Sift Science.

Plaid allows users to instantly link and verify their bank accounts within the Dwolla platform, rather than being redirected. Sift Science is a fraud monitoring system that uses machine learning and data on past transactions to determine the likelihood of new transactions being fraudulent.

Dwolla does not provide specific pricing information on either of these add-ons. Dwolla offers a couple of security measures for both you and your customers.