Online and mobile digital cash network Dwolla is breaking down one of the barriers to entry to using its service with today’s introduction of a new “guest checkout” feature for online merchants. The option will allow non-Dwolla users to pay with Dwolla on e-commerce websites, possibly even getting a discount on the item or service being purchased in the process.
The guest checkout option allows anyone with a U.S. bank account to buy online at participating merchants by initiating a one-time payment from their bank which is then processed through Dwolla’s payments network. “The one thing that we’re really trying to do – the same thing that we’ve alway tried to do – is to create this sense of an ideal transaction,” explains Dwolla’s communications lead Jordan Lampe. “One of the big pain points [for Dwolla] was that to make a payment online, you had to have a Dwolla account, and you had to have money in that account,” he says. “So what we’re doing with this is saying, ‘let’s cut ourselves out of the equation.’”
On merchants’ websites who support the new payment option, consumers will enter in, not their credit card number, but their bank account and routing number in addition to their name, address and phone, the latter of which is verified. The benefit to consumers of using this option is that their financial information is never shared directly with the merchant.
There’s another benefit, too, for those merchants who choose to implement it: consumers could actually pay less for the item in question thanks to an discounted “Dwolla Price.” The idea here is that because Dwolla’s fees are less than those of traditional credit card processors, merchants could discount the retail price of the item by what they saved in credit card fees. For consumers, that means could score a discount on their purchase, and merchants might be able to increase sales by offering the item for less. Of course, while such an option could save merchants on per transaction fees, if they still accept credit cards at all, then they’re generally responsible for monthly merchant account fees and transaction fees that vary based on total monthly volume. In other words, they’ll have to be careful when implementing such price cuts. At the time of launch, Dwolla couldn’t offer any numbers as to how many merchants will be implementing this new “Dwolla Price” option.
However, the company has managed to sign up over two dozen merchants who have committed to providing the guest checkout option on their website. These include:
Tortoise & Blonde (eyewear), Small Farm Central (farm technology solution provider), Seconds (mobile payments startup), ActiField (e-commerce platform for ticket sellers), Dash (gadget to turn cars into smartcars), Plovgh (a hyperlocal marketplace for organic food), Angelwish (a nonprofit granting wishing to chronically ill children), Eborhood (a swap-style marketplace), Free Agent (account system), Web Hosting Buzz (web host), Gombler (gaming startup), MyHouseTab (mobile payments), SureDone (e-commerce platform), ZooZ (payments SDK provider), Spreedly (payment gateway), Casual Corp (product studio), SupplyHog (coming soon; building suppy provider for contractors), Givr (mobile giving), Startup Threads (merchandising for startups), Muzooka (social streaming music app), MistoBox (subscription commerce for coffee drinkers), Plated (coming soon; e-commerce meal delivery), and Path.To (jobs site). HTML5.com, TicketCake, and Fun Org will also be live soon.
Arguably, these are not big-name brands here, even within the startup world. Many of the merchants aren’t online retailers selling physical goods, either. It will be interesting to see if other merchants will adopt the feature now that the option is publicly available.
POS Integrations, Too
These launches are only the first of many new features Dwolla has in store. The company is already thinking of, partnering on, and preparing to implement a number of other things to broaden its reach in the consumer space. These range from ways for users to pay with Dwolla even when the merchant doesn’t offer it, as well as partnerships with mobile payment providers who will implement Dwolla as payment choice.
In recent weeks, the company partnered with banking and payments service provider mFoundry and launched its own competitor to PayPal’s MassPay, to further increase its visibility with banks and merchants alike.