Dwolla, the Des Moines, Iowa, payments innovator, has announced 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).
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Dwolla has announced a lineup of participating online merchants who are indexed on the company's storefront. Included are delivery service WunWun, WiFi hotspot provider Karma, and Hugh & Crye, a Washington, D.C.-based online retailer of gentlemen's clothing.
Dwolla is partnering in Dwolla Credit with Alliance Data Retail Services and its banking subsidiary Comenity Capital Bank.
In the press statement, James Wester, research director of global payments at IDC Financial Insights, said, "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."
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 has for some months offered its members payments tools via Dwolla.
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