You did send out an email with about 30 days of notice. What people are telling you is that 30 days is not adequate. When you started the company, you asked people to trust you and your vision. You made the case for businesses to tie themselves to Dwolla systems and you demonstrated a desire to grow your market share by eliminating per transaction fees. I don’t think anyone would argue Dwolla’s right to switch gears. The problem is lead time. If you gave your customers several months of notice so they can decide how to react to your decisions, you make a reasonable case. When you switch gears in 30 days and go from being a low cost provider to a normal cost provider, you assume too much since you are still a smallish player in the FinTech space. I’m not entirely sure your fee schedule is unfair but I do know that it is a lot compared to what it was.
And the FiSync discussion ties directly into this. When we had the ability to instantly move funds through BBVA, the story was unique and paying your fee is simply a cost of having that uniqueness. Your being on a steering committee with the federal government is not unique and is not a replacement for FiSync. I still question whether maintaining FiSync was that big of burden, but I wouldn’t know since you don’t share much on that side of things. Since you have an account at BBVA to enable these transactions, it does seem like the cost must of been relatively low. If you considered it a marketing cost to demonstrate to customers that they should expect real time money movement and demand it of their banking system, Dwolla sits in a “disruptive” position. Since you have fallen back to providing a cheaper version of PayPal, Stripe, etc you are not really disrupting as much as conceding.
But again, the whole thing comes back to timing and communication. Dwolla did not communicate the changes to the API very well last year. And the API has a couple of bugs to boot. Dwolla did not communicate the discontinuation of FiSync AT ALL. And the fee changes were done with only one month of notice.
For one, I’m left with a feeling that Dwolla’s business model is likely to fail and I should consider that possibility when building out my integration points. I feel that way since the things that made Dwolla unique are gone. And now Dwolla is competing primarily on price. Competing on price against large established players in the industry doesn’t feel very wise to me.
I’m not ready to bail on Dwolla just yet, but I’m definitely “circling the wagons” in case Dwolla turns off the lights. And I’m forced to shop around since you came out of the gate with a fee structure that isn’t trivial.