Dwolla is a

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

-only fintech company that provides businesses with a connection to the

ACH Network In the United States, the ACH Network is the national automated clearing house (ACH) for electronic funds transfers established in the 1960s and 1970s. It processes financial transactions for consumers, businesses, and federal, state, and loca ...

or RTP Network (

Clearing House Clearing house or Clearinghouse may refer to: Banking and finance * Clearing house (finance) * Automated clearing house * ACH Network, an electronic network for financial transactions in the U.S. * Bankers' clearing house * Cheque clearing * Cl ...

’s privately-owned

real-time payments Real-time or real time describes various operations in computing or other processes that must guarantee response times within a specified time (deadline), usually a relatively short time. A real-time process is generally one that happens in defined ...

network).

History

The company was founded in 2008 with services based only in

Iowa Iowa () is a state in the Midwestern region of the United States, bordered by the Mississippi River to the east and the Missouri River and Big Sioux River to the west. It is bordered by six states: Wisconsin to the northeast, Illinois to the ...

, and having two employees. After raising US$1.31 million in funding, Dwolla launched in the

on December 1, 2010, with founders Ben Milne (CEO) and Shane Neuerburg (CTO), in

Des Moines, Iowa Des Moines () is the capital and the most populous city in the U.S. state of Iowa. It is also the county seat of Polk County. A small part of the city extends into Warren County. It was incorporated on September 22, 1851, as Fort Des Moines, ...

, and initially with a few small banks and retailers. By June 2011, Dwolla had grown to 15 employees and 20,000 users, and it processed $1 million in a week for the first time. Dwolla began with

Veridian Credit Union Veridian Credit Union is a credit union in the state of Iowa, USA, with assets over 5 billion USD and a member base of over 250,000. Its field of membership consists of: * Those who are living in or are working for a business located in any cou ...

for banking services, while ''The Members Group'' of the Iowa Credit Union League processed their transactions.

Products and services

Dwolla provides a

white label A white label record is a vinyl record with white labels attached. There are several variations each with a different purpose. Variations include test pressings, white label promos, and plain white labels. Test pressings Test pressings, usua ...

service consisting of APIs to use the ACH system and white label services expanded from payouts to include instant bank authorization for debiting bank accounts

FiSync

On May 25, 2011, Dwolla released its ''FiSync'' integration, which aims to allow instantaneous transactions instead of the typical 2–3 day of the

transactions. , Dwolla had 11 financial institutions signed on, providing access to 600,000 potential customers. Dwolla quietly discontinued FiSync on January 31, 2017.

Government payments

As of April 2013, the Iowa Department of Revenue allows businesses that pay cigarette stamp taxes to use Dwolla as a method of payment. Iowa Governor

Terry Branstad Terry Edward Branstad (born November 17, 1946) is an American politician and former diplomat. A member of the Republican Party, he served three terms in the Iowa House of Representatives from 1973 to 1979 before serving as governor of Iowa fro ...

announced on January 6, 2014 that the state will expand the partnership to allow customers of Iowa Department of Transportation to pay fuel tax and vehicle registration costs online using the service. In February 2015, the US Treasury Department's Bureau of Fiscal Service added Dwolla to the system which allows US Federal agencies to issue and receive electronic payments.

Inadequate security practices

On February 27, 2016, the

Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) is an agency of the United States government responsible for consumer protection in the financial sector. CFPB's jurisdiction includes banks, credit unions, securities firms, payday lenders, mortg ...

(CFPB) released its first data security-related enforcement action"Administrative Proceeding"
U.S. Consumer Financial Protection Bureau. against Dwolla, Inc. Relying on its UDAAP-related authority, the CFPB alleged that Dwolla failed to maintain adequate data security practices despite representations made on the company website and in communications with consumers that the company has implemented practices that exceed industry standards. Among other requirements, Dwolla has agreed to settle and must cease making any misrepresentations about its data security practices.

The Dwolla Platform

In 2016, Dwolla became a B2B SaaS company, selling its payment software directly to businesses so they can offer their customers bank transfers as a payment option in addition to credit cards. Since 2016, the Dwolla Platform has added new features along with real-time payments, push-to-debit payments and Same Day ACH credits or debits.

References

External links

* {{Payment service providers Payment service providers Electronic funds transfer Online financial services companies of the United States Privately held companies of the United States 2010 establishments in Iowa Financial services companies established in 2010 Companies based in Des Moines, Iowa