Des Moines, Iowa-based payments innovator Dwolla announced on Oct. 22 a rollout of a new credit product that will allow approved customers to access credit and spend it online at a network of merchants.
“Credit is not new, but providing it on a real-time network that replaces interchange fees and positions credit to evolve is, and that’s what Dwolla Credit does,” said Ben Milne, CEO and founder of Dwolla, in a prepared statement. “Dwolla Credit places millions of dollars in immediate buying power right at the fingertips of a network at a transaction cost that’s next to nothing and in a way that’s as simple as logging into your email.”
Traditional interchange charges are replaced in Dwolla Credit purchases with a flat 25-cent fee, and transactions under $10 are free.
Dwolla also announced a lineup of participating online merchants who are indexed on the company’s storefront.
Delivery service WunWun, WiFi hotspot provider Karma and Hugh & Crye, a Washington-based online retailer of gentlemen’s clothing, are included among the online merchants.
Dwolla is partnering in Dwolla Credit with Alliance Data Retail Services and its banking subsidiary Comenity Capital Bank.
“It’s a 21st century world out there, so there’s a push for a real-time payment method that settles a transaction between a merchant and customer immediately but at a much lower cost, said James Wester, research director of global payments at IDC Financial Insights, in the release.
Presently in what Dwolla calls a beta stage, Dwolla Credit is slated for broad rollout in early 2014.
Dwolla, with support from CUSO The Members Group, has long had high visibility among credit unions. The $2.4 billion Waterloo, Iowa-based Veridian Credit Union offers members payments tools via Dwolla.