Dwolla Review - Focos

Dwolla Review

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Score based on customer user experience

What is Dwolla?

Although Dwolla was originally a P2P bank transfer platform catered to businesses, it is now an ACH payments facilitator. Since then, the company has developed a PayPal-like service that merchants and consumers could use to a platform that will primarily benefit huge businesses that handle many B2B transactions or require some of the company’s specialized services, such as mass payout support. Unlike almost every merchant services provider we’ve looked at, Dwolla does not accept credit or debit cards. Unlike Square, the company is not a merchant account provider or a payment service provider (PSP). Its bank transfer-only business model was created specifically to avoid the significant credit card associations’ high interchange fees. As a result, you won’t be able to get support for credit card terminals or point-of-sale (POS) systems. Dwolla also does not support the check scanners used to convert a paper check into an electronic check payment.

You won’t be allowed to use credit or debit cards, cryptocurrency, PayPal, or any of the other various online payment options that have emerged. It’s just plain and straightforward bank transfers. So, how does Dwolla deal with ACH transactions? It’s similar to a digital wallet (like Venmo or CashApp), designed for B2B payments rather than P2P transactions. You can send, receive, and facilitate payments with a Dwolla account. Suppose you’re wondering what “facilitate payments” means. In that case, it simply means that you can create a platform that allows users to send money to one another without you, the merchant, having to do anything. (As a bonus, you can monetize the platform by charging a facilitator’s fee for the transaction.) You can also keep balances in Dwolla, just like a digital wallet. If there’s one good reason to accept ACH payments, it’s to make recurring payments possible. Dwolla, as you might expect, accepts regular payments. These fees are also compatible with metered billing, which charges a monthly variable amount based on usage. This is perfect for utility billing, but it can be applied to any usage-based service. Unlike PIN debit payments, ACH transactions typically lack a built-in function to verify that a customer’s account has sufficient funds before attempting a withdrawal. Before debiting funds, Dwolla allows you to check the balance on a customer’s account (with their permission, of course).

If Dwolla’s niche was accepting ACH payments, any payment processor that accepts them could fill it. On the other hand, Dwolla offers a one-of-a-kind platform built entirely around ACH payments. Users must verify their accounts before making or receiving payment with Dwolla, which you won’t find with most credit card processors. Micro-deposits and Dwolla.js are two Dwolla options for this. Micro-deposits send two small amounts to the user’s bank account (typically less than $0.10) to verify the account information. Dwolla.js is a JavaScript library that allows you to securely send bank account information from your website to Dwolla without going through your server. While Dwolla.js can instantly verify a bank account, micro-deposits take several days to confirm. User accounts on Dwolla are divided into three categories: Receive-Only, Unverified, and Verified. Customers who can only receive payouts do not need to go through the verification process. They are unable to keep balances in a Dwolla wallet. Unverified accounts can send and receive money, but they are limited to $5,000 per week in sending. Unverified reports can only transact with verified customers or the master Dwolla account because they only gather their first and last names and email addresses. Accounts verified can be used for either personal or business purposes. A verified business account can address and receive funds up to $10,000 per transaction. In contrast, a verified personal statement can only send and receive $5,000. A customer’s Dwolla wallet can hold a balance in both cases. Dwolla.js is the company’s top security feature, as we mentioned earlier. This feature drastically lessens the scope of your PCI compliance requirements by preventing sensitive customer bank account details from ever being recorded or stored on your server. Dwolla also uses tokenization to restore actual account numbers with one-time “tokens” that hackers cannot access. Dwolla has several third-party integrations available to its users right now. Plaid, which gives another option for customer bank account verification, is one of the more valuable integrations. Plaid integrates directly with your website and provides instant account verification through tokenization. It’s also compatible with mobile devices. Another integration is sifted, a fraud-prevention service that uses machine learning and a global data network to detect and prevent fraudulent activity. Dwolla’s customer service options range from mediocre to excellent, depending on which pricing plan you choose. It’s a well-known fact in the financial world that larger clients receive better service, while smaller clients must do what they have. Dwolla, on the other hand, makes it official. You’ll get some of the best support options we’ve seen anywhere if you’re a paying customer on the Scale or Custom plans. If you’re only using the Pay-As-You-Go plan and aren’t paying Dwolla a monthly account fee, you’re pretty much on your own if you have a problem.

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