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Dwolla

Integrate secure, automated ACH and real-time bank payments into your application. Offers a flexible API for direct bank transfers, account verification, and mass payouts.

Screenshot of Dwolla website

What is Dwolla

Dwolla is a financial technology company that provides a platform for businesses to facilitate bank-to-bank payments. Its core purpose is to offer a simple and powerful API for integrating Automated Clearing House (ACH) and Real-Time Payments (RTP) into applications and software. This allows businesses to send, receive, and manage funds directly between bank accounts, bypassing traditional card networks. Founded in 2008 by Ben Milne, Dwolla is headquartered in Des Moines, Iowa. The company focuses on making account-to-account transfers more efficient, secure, and affordable for various industries, including lending, real estate, insurance, and manufacturing.

Dwolla Features

Dwolla offers a suite of features designed for modern payment operations:

  • Multiple Payment Speeds: Users can choose the transfer speed that fits their needs, including Standard ACH, Same-Day ACH, and near-instant options like Real-Time Payments (RTP) and FedNow® Service.
  • Automated ACH Payments: Automate direct bank transfers for collecting payments, paying vendors, or disbursing funds. This reduces manual work and the costs associated with paper checks.
  • Mass Payments: Send payments to thousands of recipients at once with a single API request. This is ideal for marketplaces, gig economy platforms, and payroll.
  • Open Banking Integration: Securely connect to customer bank accounts using modern technology. This includes features like Instant Account Verification (IAV) to confirm account ownership and Balance Check to reduce the risk of failed payments.
  • Digital Wallet: A feature that allows businesses to hold funds within the Dwolla network. This can be used to speed up transaction times between users on a platform.
  • Developer-Friendly API: A well-documented, robust API that allows for deep integration into existing applications. Dwolla also provides a free sandbox environment for developers to build and test their solutions before going live.
  • Secure Platform: The platform is built with security in mind, using measures like tokenization to protect sensitive data, encryption, and continuous 24/7 monitoring.
  • Management Dashboard: A web-based interface for non-technical team members to view transaction history, manage customers, and monitor payment activity.

Dwolla Pricing Plans

Dwolla's pricing is structured to accommodate businesses of different sizes and transaction volumes. The plans are typically usage-based, meaning costs are related to the number and type of transactions processed. While specific prices are not publicly listed, the model generally includes a few tiers:

  • Pay-As-You-Go Plan: This plan is designed for startups and businesses with lower transaction volumes. It offers access to core payment features with pricing based on usage, without a monthly commitment.
  • Scale Plan: Aimed at growing businesses with increasing transaction volumes. This plan typically includes a monthly fee that covers a certain volume of transactions, with additional features and dedicated support.
  • Custom Enterprise Plan: Tailored for large enterprises with high transaction volumes and complex payment needs. This plan offers custom pricing, premium support, and access to all of Dwolla's advanced features.

Dwolla Free Plan

Dwolla does not offer a free plan for processing live transactions. However, it provides a free sandbox environment for developers. This sandbox allows full access to the Dwolla API for building and testing integrations without any cost or commitment. Developers can simulate transactions, create customers, and test all functionalities in a controlled environment before deciding to move to a paid, live account.

How to use Dwolla

Getting started with Dwolla involves integrating its API into your business application. Here is a typical workflow:

  1. Create a Sandbox Account: First, sign up for a free developer sandbox account on the Dwolla website. This gives you API keys for testing.
  2. Build and Test: Use the API documentation to integrate Dwolla's payment functionality into your software. You can test adding customers, verifying bank accounts, and initiating transfers in the sandbox.
  3. Apply for a Live Account: Once you are ready to process real payments, you must apply for a live Dwolla account. This involves a business verification and underwriting process.
  4. Go Live: After approval, you will receive your live API keys. You can switch your application from the sandbox environment to the production environment.
  5. Onboard Users: Your application will guide your end-users to securely connect and verify their bank accounts through Dwolla.
  6. Manage Payments: You can now initiate, receive, and track payments programmatically through the API or monitor activity through the Dwolla Dashboard.

Pros and Cons of Dwolla

Pros:

  • Cost-Effective: ACH transfers are significantly cheaper than credit card processing, especially for large transactions.
  • Powerful API: The API is flexible and well-documented, giving developers great control over the payment experience.
  • Multiple Transfer Options: Offers a range of speeds from standard ACH to real-time payments, providing flexibility.
  • High Security: Strong focus on security with features like tokenization and bank verification.
  • Good for High Volume: The platform is built to handle mass payments and high transaction volumes efficiently.

Cons:

  • Requires Technical Expertise: As an API-first platform, it requires development resources to integrate.
  • US-Only Transactions: The service is primarily focused on bank transfers within the United States.
  • Complex Pricing: The lack of transparent pricing on the website can make it difficult to estimate costs without contacting sales.
  • Onboarding Process: The underwriting process for a live account can take time.

Dwolla integrations

Dwolla is an API-first platform, which means it is designed to be integrated into other software applications rather than offering a large library of pre-built, third-party app integrations. Its main integration is with the U.S. banking system itself.

However, it partners with several open banking and technology providers to enhance its service:

  • Plaid: Dwolla integrates with Plaid for instant account verification (IAV). This allows users to securely connect their bank accounts by logging in with their banking credentials, which simplifies the onboarding process.
  • Other Data Aggregators: Dwolla supports connections with other open banking data providers to offer flexibility in how businesses verify customer bank accounts.

Businesses use the Dwolla API to build custom integrations into their own platforms, CRMs, and ERP systems.

Dwolla Alternatives

  • Stripe: A popular payment processing platform that offers a wide range of services, including credit card processing, international payments, and ACH Direct Debit. Stripe is a broader solution, while Dwolla specializes in account-to-account payments.
  • Plaid: While also a Dwolla partner, Plaid offers its own payment initiation services (PIS) that compete with Dwolla. Plaid's strength is in its vast bank connectivity, while Dwolla's is in its dedicated payment processing infrastructure.
  • Modern Treasury: A payment operations platform that helps companies manage the full lifecycle of money movement, including initiation, reconciliation, and tracking. It often works on top of banks and payment providers like Dwolla, but also offers direct payment initiation.
  • Adyen: A global payment company that provides a single platform to accept payments from anywhere in the world. Adyen is a strong alternative for businesses with international operations, as it supports many more currencies and payment methods than Dwolla.

Dwolla API

Yes, Dwolla provides a comprehensive and well-documented RESTful API, which is the core of its product. The API allows developers to programmatically manage customers, attach and verify bank accounts, and initiate various types of bank transfers.

Developers can get free API keys for the sandbox environment by signing up for a developer account on the Dwolla website. The developer portal provides extensive documentation, guides, and SDKs for popular programming languages.

Here is a conceptual example of using a client library to create a customer in Node.js:

const dwolla = require('dwolla-v2');
const client = new dwolla.Client({
  key: 'YOUR_API_KEY',
  secret: 'YOUR_API_SECRET',
  environment: 'sandbox' // or 'production'
});

const customerData = {
  firstName: 'Jane',
  lastName: 'Doe',
  email: 'jdoe@example.com',
  type: 'personal',
  address1: '99-99 33rd St',
  city: 'Some City',
  state: 'IA',
  postalCode: '50309'
};

client.post('customers', customerData)
  .then(res => console.log(res.headers.get('location'))); // Returns URL of the new customer resource

Dwolla Affiliate program

Dwolla does not have a traditional, public affiliate program where individuals can sign up and earn a fixed commission per referral. Instead, it offers a Partner Program designed for businesses, software platforms, and developers who want to build with or refer clients to Dwolla.

This program is more of a strategic partnership and is structured in different ways, including technology partnerships and referral partnerships. Compensation and benefits are typically customized based on the nature of the partnership. To join, interested businesses should visit the 'Partners' section on the Dwolla website and contact their partnership team to discuss opportunities. There is no standard commission rate publicly available.

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Dwolla: The developer API for modern bank payments. – SAASprofile