Should Dwolla Be an Option for Your Small Business?

Dwolla for small business paymentsFor years people have been making purchases using services linked to our credit or debit cards. New technologies enabling us to use our phones or devices to buy and sell like Square and PayPal Mobile are just starting to go mainstream. But what if there was an even easier solution to payments out there? Dwolla might very well be that solution.

What is Dwolla?

Ben Milne and Shane Neurburg founded Dwolla out of Des Moines, Iowa in 2009. Since then, the ecommerce company has grown immensely. What exactly does Dwolla do? As Lynn Hicks at USA Today writes, Dwolla is based on “an idea so simple, yet so mind-boggling: Use the internet to move money quickly, safely and at as low a cost as possible.” That’s what Dwolla does.

Dwolla interacts with social platforms as well as individual businesses to enable money transfers for services or purchases from anyone with a Dwolla account. The service has been called a “global platform for instant cash transfer” by Milne according to an article by Haydn Shaughnessy at Forbes. Dwolla links directly with a person or business’ bank account. This is how it can claim this flattering description.

Some Perks of Using Dwolla

Dwolla can be used for an online business, for a brick-and-mortar business, or for a hybrid business. More importantly, it can be a way for agencies to pitch another great service to the businesses they work with. Dwolla can be used to help businesses move online and expand their digital presence with ease.

The way Dwolla handles transactions is arguably safer than other methods of payment, too. Another huge plus is the fact that Dwolla requires no contracts or anything related to a membership or fee-based service. Dwolla moves money, and charges you $0.25 for any transaction over $10. There are also free tools provided to help merchants handle their finances, payments, and receipts through Dwolla – another great perk for agencies and their clients.

A great post on Firmology explains why Dwolla is useful for small business. The post explains that Dwolla eliminates the need for “credit cards and a card reader,” a “payment gateway and payment processor,” “a card network,” and reliance on “the antiquated ACH (Automated Clearing House)” to transfer funds. In fact, Dwolla has been so effective in transferring money that even the state of Iowa has taken notice and jumped on board.

Dwolla and the State of Iowa

Recently, news broke that the state of Iowa is looking into the service, as Jessica Leber reports from MIT Technology Review, for “potentially collecting property taxes, issuing refunds, paying contractors, and renewing vehicle registrations.” The ease and cheap cost of moving money that Dwolla provides can save large and small organizations or businesses lots of money.

The partnership possibilities are endless and they are being tested in Iowa. Earlier in January Harrison Weber reported for The Next Web that Dwolla has partnered with a school district in Iowa to allow “parents and guardians to make online payments towards their child’s lunch account.” Not only will Dwolla help governments and businesses, but they can keep your kid from losing his lunch money!

 If You Wanted Only One Reason to Use Dwolla: (Almost) No Fees

The primary reason to consider Dwolla for your business – large or small – is the fact that you can kiss credit card fees goodbye. As Haydn Shaughnessy reminds us, relying on credit cards to do business means you “lose 2-4%” of your sales. Using Dwolla means faster and cheaper service. Any transaction over $10 equals $0.25. Anything under $10 is absolutely free. How can you beat that deal, especially for small businesses? I’m not sure how.

The Verdict?

The more I looked into Dwolla the more interested as an individual I was in their services. Cutting the cord from credit card fees must be enticing for any agency or business; I encourage people to check out Dwolla. I think I’ll be signing up soon. Who knows, Dwolla might be the beginning of the end for cash!

Do you think Dwolla can help your business grow?


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Patrick currently lives in Somerville, Massachusetts, where he is studying for a Master's Degree in Intercultural Relations. Upon graduation from Penn State in 2008, he spent two years overseas in Kyrgyzstan with the U.S. Peace Corps. While writing is currently his chosen way to put food on the table, he loves fitness and exercise, which he believes makes up for his avid computer gaming habit.

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