No More Instant Transfers


(Jerry Johnson) #1

It looks like Dwolla quietly discontinued instant transfers with no warning. This capability was a valuable distinction for Dwolla versus other payment handlers. I’m curious why this was discontinued. We’re seriously reconsidering our Dwolla relationship because of this change. Since Dwolla won’t insure the money directly (Dwolla is an agent, not a bank) and now we can’t move money to/from our bank in anything close to fast, we’re stuck wondering what would happen if Dwolla suddenly went out of business and we had large amounts in our Dwolla account. Of course, same-day ACH is still months/years away.

Anyone else concerned?


(PK) #2

I am on the same boat. See this tweet about how I and others feel: https://twitter.com/neatschool/status/835251373142728704

I understand it is a business dictated decision but rolling it out with really no announcement is not what I thought Dwolla is about…


(Jerry Johnson) #3

And there’s more “good” news…

With less than 1 month of warning, Dwolla transfers will now be 0.5% per transfer. So now I’m completely lost as to what Dwolla is trying to accomplish. With dozens of payment gateway providers that also provide ACH transfers at similar rates (sometimes cheaper), I don’t see much of a market for Dwolla. With FiSync, they were truly unique. Without it, they were simply the lesser cost vendor with fixed cost accounts. Without being the least expensive, I just don’t see what makes Dwolla different than other, more established vendors. I seriously doubt Dwolla will be around much longer without something to differentiate the company.

Even if all that was left of FiSync was BBVA and a couple of credit unions, at least they provided something unique. They used to charge 0.25 per transfer. Then they went to free transfers. And now they are at 0.5% per transfer. And there’s no indication if the transfer price applies to white label or not.

The communication of strategy is simply awful with Dwolla. After years of trumpeting Dwolla as a game changer, I’m really eating crow now. And while my interests are substantial, at least my whole business wasn’t based on Dwolla. Whatever ecosystem was developing around Dwolla is going to evaporate now. And the real problem is credibility, which is now gone, too.

I’m really disappointed with the market direction here. And I can’t get anything more than a formed response when trying to get some additional guidance.

With over $40M raised in capital, I would expect a much better communication effort.


(PK) #4

I agree, FiSync was amazing. I have an account that changed their bank to BBVA just because of FiSync & Dwolla. Another one told me that if they could write Dwolla checks, they would not need a bank any more. I guess there were just not enough of those success stories. But yes now the differentiation is all gone. I am sure the investors are envious of the Stripe success and they want to make them Stripe, if you look at Strip ACH you will see that the price is very similar, and Dwolla remains a bit cheaper.

I also agree that communication (or lack of it) has been terrible. You could not expect to keep it free for ever and 25c was too little, but the rush with which they make their changes combined with the lack of communication leaves a very bad after taste. The same happened when they dropped Dwolla Direct, one month notice.

Small business who use Dwolla live with the fact that at any point in time a big chunk of their monthly revenue is in Dwolla’s control, and they want somebody they can trust. Trust is earned hard and can be lost very quickly when there is abrupt communication like this.

I used to stick out my neck for Dwolla when I was recommending payment processors, sorry not any more… And I am waiting for the e-mails of why I told customers that Dwolla is free :frowning: I am in the process of writing a very apologetic e-mail…

PK
pk@gae123.com


(Dwolla) #5

Thanks for the feedback regarding FiSync. We also feel strongly about FiSync and the opportunity of providing a real-time payment infrastructure. While FiSync represented a proof of concept to the industry and real value to its users, it fell short on reaching mass adoption.

We are now utilizing our experience with FiSync as a part of a larger conversation through the Faster Payments Task Force. More information regarding this initiative and Dwolla’s involvement can be found at https://www.dwolla.com/updates/dwolla-faster-payments-proposal-download/

As a part of Dwolla’s transition to a SaaS (Software as a Solution) payment platform, we’ve rebranded and segmented our two core products. Dwolla’s API is now the Access API, the same powerful payment API connecting your application to the banking system.

We’ve bundled our easy-to-use payment tools into a self-serve pay-as-you-go suite, Transfer. The Transfer suite provides a variety of payment tools including customer identification procedures, bank verification, and fraud monitoring. All of this is offered with simple pay-as-you-go pricing.

We understand that this change will impact existing customers. Our support team is here to assist if you have questions about Transfer or are simply wanting to deactivate your Dwolla account.

Dwolla Support
support@dwolla.com


(Syed Ashraf) #6

My name is Syed and I am the business customer for DWOLLA. I am running a small real estate company named outside of Chicago Suburb. I am with Dwolla for last 5 years and have seen all kind of changes in your company. Your communication process is terrible. The most disturbing change is the current one. I just login to my dwolla account and found that you are going to charge 0.50% or $5.00 fees for every ACH transaction starting from 30th March. Its a surprise to us as there was no email communication. Does the transaction fee is negotiable or is it permanent now ?

I need to look for other options now if dwolla is not doing anything on this new transaction fee.


(Dwolla) #7

HI @asharaf14

Last Wednesday, March 1, we sent an email out to all business, government and non-profit Dwolla accounts. This email introduced the launch of Transfer and the transaction fees that will go into effect for existing Dwolla customers on March 30.

The fee is simple and fair: 0.5% per transaction ($0.01 min fee, $5 max fee). You can pay as you go and upgrade as you grow. Once your volume goes up and your transaction fees increase, you can upgrade to a monthly package and remove the transaction fees.

We understand that this new fee structure isn’t suitable for all business and organizations. If you have additional questions or would simply like us to deactivate your account, please reach out to support@dwolla.com.


(Jerry Johnson) #8

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.


(Syed Ashraf) #9

Jerry is correct. I am using Dwolla for 5 years so I am the loyal customer but I am not happy with the new fee structure, I believe, Dwolla pricing is going back to higher end of the range. In my research, Most of the players are capping the ACH transaction with $5.00 so dwolla is not cost effective when it comes to the pricing now. Even Intuit has better pricing than Dwolla as intuit offers the free invoicing etc. etc. I don’t like the sudden changes and the biggest problem is that I have to train all my clients to use the new payment system. my clients was fine and people were using Dwolla for many years…I hope, Dwolla can come back with new fee structure like a small monthly fee and then flat fee for ACH’s…For starters Packages, people are charging $25 monthly fees and plus 0.30 cents per ACH transaction…Lets hope Dwolla rethink about the fee structure. Please take a look on your competitor pricing Example: Paysimple, Forte, FINSYNC, ACHQ Etc etc…I am ok with monthly subscription and then low flat fees…