Dwolla Adds Another Iowa CU as P2P Client
Social payments technology pioneer Dwolla on Thursday announced it had inked a deal with Ames, Iowa-based Ace Community Credit Union to provide the $32 million institution a suite of online, mobile and social payments tools.
This follows on the announcement two weeks ago that Des Moines, Iowa-based Financial Plus Credit Union, a $90 million institution, had inked a pact with Dwolla, also based in Des Moines.
“We hope to be in as many as 20 financial institutions by year end,” said Dwolla founder Ben Milne. He added that conversations were ongoing with many institutions, “many of which are not in Iowa.”
Attaining a national footprint will be a challenge, Milne acknowledged, especially with entrenched players such as PayPal and, increasingly, Google eyeing mobile payments. But a Dwolla difference is rigorously low pricing – it’s set a flat fee of 25 cents per transaction - and that, said Milne, is a game changer.
He also announced that the company now has hit a milestone where it is processing $1 million in transactions daily.
Another Dwolla difference is that the service has built in the ability to pay cash to Facebook, Twitter and other social users – even when the payer may not know the other person’s email address. No other service, said Milne, has the strong social tool set Dwolla has developed.
Milne commented, too, that there is plain irony in the fact that Dwolla is getting its initial traction in small credit unions. “It is ironic that we are innovating through small credit unions. They are often pigeonholed as not innovative. But it is amazing how fast we can get executive level buy in and product rollout at a small credit union. This could take two years in a large institution,” he said.
A key to Dwolla’s acceptance by small credit unions, said Milne, is that an investor is Des Moines-based CUSO The Members Group. “I call it our parental supervision,” said Milne. “TMG is an active, daily part of our company.”
At TMG, chief Dwolla lead Brian Day acknowledged high hopes for Dwolla. He indicated that TMG believes Dwolla will “have strong appeal for the younger demographic.”