Originally established as a P2P lending platform, Dwolla is a U.S.-based ACH payment facilitator established in 2008 in Des Moines, Iowa, offering low-cost payment processing to online and mobile businesses. Here is a Dwolla review laying out its pros and cons to give merchants a bird’s eye view of how the company can affect their business.
Unlike a traditional payment processing company, the provider does not facilitate credit card processing and only limits its services to bank transfers. The provider offers while-label services, allowing merchants to customize the software to match their company’s branding.
Dwolla is an ISO of Veridian Credit Union and does not offer merchant accounts. The provider offers a flexible and scalable suite of solutions with a single API integration. Merchants can add the solutions to their existing system or shift to a completely new mode of payment. The company promises a tech-savvy platform to process mass payouts and initiates electronic payment via RTP and ACH networks.
The provider aims to eliminate transfer delays, high interchange charges, and fraud associated with credit card transactions. The company’s expertise is especially directed toward business-to-business payments and large-scale companies processing high-volume transactions. It has a unique approach to marketing strategies with instant cash transfer solutions.
The company enables merchants to accept payments electronically through the ACH network instead of cash or credit. Since merchants do not have to pay the credit card company, this payment method has a lower processing cost. The provider allows recurring billing and offers Plaid, Slack, and Sift integration.
As the company is not a traditional credit card processing company, it does not purvey the equipment and list of services a merchant service provider offers. A Dwolla business account is like a digital wallet to hold funds and use them as payments. The company provides SDKs and developer tools, allowing users to create and develop beyond possibilities.
According to Dwolla reviews, merchants can verify their accounts by logging in through the Dwolla platform and sending a micro-deposit to verify the information. The company offers services for unverified accounts as well. Merchants must provide their name and email address to transfer and receive funds limited to a weekly $5000. However, unverified accounts cannot hold funds like digital wallets.
Merchants can schedule regular payments to a specific date and set up recurring billing to avoid delayed payments and reduce manual collection time. This way, they don’t have to chase down customers or request payments after every interval and have payments automatically deducted from the customer’s account on a set date. Recurring payments are a great way to ensure a steady cash flow, enabling merchants to plan their expenses.
The provider offers a list of useful integrations to expedite the process and increase efficiency. With QuickBooks integration, the company eliminates manual data entry and provides real-time reports, allowing merchants to access and control their financial books from anywhere on their smartphones. Plaid integration ensures instant account verification while offering tokenization. Merchants do not have to save sensitive information, eliminating the PCI compliance restriction.
The provider integrates with Sift to monitor past transaction data and detect and prevent fraud threats. Slack is another effective integration that offers live updates, notifying merchants of failed transactions, negative balances, account verifications, and much more.
Dwolla reviews portray that the company offers API two-factor authorization and tokenization to store the data as a temporary token that can only be used once to ensure it cannot be forged or exploited by hackers. The provider verifies a customer’s account information, confirming that it is secure and free of scams. Merchants do not have to store any data on their servers, reducing the risk of a data breach. Furthermore, merchants are not compelled to get PCI compliance.
Fees and Contract Details
Originally, the company charged $0.25 for above $10 transactions without any contract or additional fees. For additional services, merchants were charged a flat monthly fee without PCI compliance, transaction, service, or cancellation fees. The company offered:
After the updated policies, the provider did not put forward information regarding its pricing and contract terms and erased the available details. According to multiple Dwolla reviews, the company offers four pricing plans for enterprises;
The Dwolla reviews indicate that the company trains an in-house sales team instead of employing outside agents to promote its services. Even though it does not maintain adequate information on the website, there are no complaints against the provider’s sales tactics.
The company has mentioned an email address for its clients and offered support tickets to reach out to a service representative. Merchants who have subscribed to the pay-as-you-go plan are only offered forum support. The provider’s phone support and live chat accessibility are reserved for merchants with the scale plan.
Furthermore, they are assisted by a dedicated sales agent to answer their queries and help them understand the company’s policies. The company has social media handles and company blogs on the website for merchants to get an overview.
The company has received over 50 complaints on multiple review platforms. Some of the complaints on the online forums concern old services offered in the past. Complaints related to the recent issues include unavailable customer support, slow transfer, technical problems, and lack of communication.
The provider was charged with a class-action lawsuit in 2016 filed by the Consumer Financial Protection Bureau. The company was accused of deceiving merchants with false claims about its data security policies.
The company does not have a separate profile on BBB and is grouped in a single profile with other back-end processors. The provider has received four formal complaints in the past 36 months concerning billing and service issues. Only 2 of these complaints were paid attention to. Dwolla also received two informal complaints regarding the invasion of privacy and customer service scams.
In addition to the pricing and basic services, there are various factors to consider while choosing a payment facilitator for your business. The provider has some underlined shortcomings that are impossible to ignore. It caters to a limited business category and offers a restricted approach that can only be expanded with higher rates. Merchants face poor support, slow transfers, and minimal financial scope, and the company’s security features are only good on paper.
The company only offers ACH processing and does not support alternate payment methods. Merchants must find a separate service provider to meet their credit card processing needs and keep the provider for ACH processing which can be too expensive for most businesses. However, several companies in the market are offering both services, making Dwolla an unnecessary option.
The company does not provide adequate information about its services and fails to offer price transparency. Initially, the official website had some information regarding the fee structure, but it was erased after the update in the company’s infrastructure. After the shift, the website only gives a basic overview of the company’s goals. It does not initiate the detailed insight required to know if a business can depend on it.
The provider’s customer support is only available for merchants with the advanced payment plan. Merchants who have signed up for the basic payment plan are deprived of phone and live chat support. Limited customer service is not a positive sign. It shows that a provider favors certain businesses over others and does not provide equal and unbiased opportunities to all its clients.
Deduced from this Dwolla review, the company is unsuitable for a business looking for an all-in-one package. It offers limited services and inadequate support options, which is problematic in the long run and may cause frustration. Furthermore, the company can only be used as an alternative to card payments as it does not support debit or credit card transactions, nor does it provide the equipment for it.
A business requiring ACH processing and credit card payment solutions must look for another service provider. Dwolla is a reliable payment facilitator for mass payouts and B2B transactions, but it is not a wise choice for small companies and retail merchants. Its products and features are restricted to online and mobile businesses dealing with daily electronic transactions.
A provider unaware of the needs of a common merchant, taking away their preferred mode of payment and failing to offer transparency and disclosure, can not be considered a reasonable option for the masses.