“I’m waving the white-label payments flag”: Q&A with Ben Milne of Dwolla
Dwolla was created with the lofty mission to build the best way to move money. After laser-focusing on providing businesses with a modern access point to the ACH network, the company made great strides toward making that target a reality. Businesses are integrating Dwolla’s simple White Label ACH API, and seeing spectacular results and improvements over their antiquated payment operations. An Instagram advertising platform integrated the API in two weeks with one developer, slashing time spent performing manual payout processing tasks by 50% and reducing payouts processing costs by 31% in the first month. A property management platform decreased time spent on manually processing reversals by 90% while simultaneously decreasing their regulatory and compliance challenges and reducing their total number of reversals by 23%. A retail marketplace was able to simplify their funds flow and decrease cashout-related support tickets by 80%, time to resolution by 50%, and decrease sellers’ time to liquidity from up to 7 days to an average of 2.
We chatted with Dwolla’s founder, Ben Milne, about his company’s evolution, and what’s next for payments.
What was your original motivation for founding Dwolla?
I wanted a way for my previous business to accept payment through our e-commerce store without paying interchange fees. I couldn’t find a good way to do it so I started researching. It took a few years to figure it all out but the genesis for the company was to create a digital layer to exchange money without using expensive rails.
How does Dwolla work?
Dwolla’s White Label ACH API gives developers the ability to build software that can move money between US bank accounts. Developers can also provision new accounts, enable real-time exchange using our digital wallet-like balance functionality, as well as send, receive, and facilitate ACH transfer between customers.
Is there a particular factor you’d credit for Dwolla’s growth?
Not giving up. Taking our customers’ feedback to heart and building a solution that resonates with almost any US business that moves money—creating an easy on-ramp to the ACH network by harnessing the power of Dwolla’s own payment infrastructure and enabling other platforms and applications to bake our ACH API right into their own technology stack.
How do you ensure users’ trust?
Do what you say you are going to do.
How has the payments space changed since Dwolla was founded?
When I was researching how to do this in 2008-09 there was no Bitcoin, Stripe, Venmo, or Braintree to speak of. Everything is different in that all of these things that are common now simply didn’t exist then.
That said, we’re all still managing bits. We’re doing it in more secure ways through more distributed infrastructure, but it’s managing bits at the end of the day.
One of the most important fundamental changes that I can see in the payments landscape is the use of tokenization and cryptography throughout new systems being built. There’s also something happening with publicly available data like the bitcoin blockchain and tying it to local data to create insights I don’t think would be available otherwise.
What’s the future for credit cards?
Offering the financial tool of credit is really powerful. The plastic card is just a distribution path for the creation of credit to people and organizations. If the card goes away, organizations will still need the credit and the banks who offer the physical credit cards are probably best positioned to offer the digital equivalent.
Over the next 10 years though, I think the plastic vehicle is going to continue to exist. It’s surprising in many ways but it’s socially baked into how commerce works so deeply that I don’t think we’ll see them go away anytime soon.
Have electronic payments gone mainstream?
If the electronic payment systems of wire and ACH didn’t work, the economy would not function. The ol’ US Federal Reserve beat everyone at their own game a decade ago with a distribution model that’s super hard to replicate.
What payment innovation are you most excited about?
The transition from batch to real-time. The transition in distribution from being centered at banks to non-bank providers.
What’s next for Dwolla?
If there was a flag that said “white label” on it, I’d be waving it right now. We’re focused on helping developers build software on the banking infrastructure, faster. The innovation is coming from developers, and we want to help them by giving them a great bank transfer API that they can build on top of and experiment with.
Our latest product, the Dwolla Dashboard and Admin, follows this theme as well. Many of our customers were building their own admin panels to manage bank transfers, customers, and monitor activity. The goal of the dashboard product is pretty simple: save developers from having to build the dashboards and give them a great one as a part of the product.
We feel that continually doing things that save developers and businesses time and make the banking infrastructure easier to use is something our customers will find helpful.
