Dwolla scores big with BBVA real-time payments

pay

BBVA Compass customers can now send and receive funds instantly using digital payments network Dwolla.

In “the biggest partnership [Dwolla has] had to date”, according to founder and CEO Ben Milne, BBVA Compass will use Dwolla’s secure payments protocol for financial institutions for instant transfers. The FiSync protocol enables the confirmation of good funds, secure authentication and real-time availability of money to and from the Dwolla network.

Clients of the bank will be able to send in real-time to other BBVA Compass account holders and the Dwolla network. Non-BBVA customers will still be able to use Dwolla, but must deposit funds directly into a Dwolla account, rather than sending money seamlesses from a bank account with BBVA or Dwolla’s future banking partners.

The collaboration makes BBVA Compass the largest financial institution to use the Dwolla platform to eliminate the wait associated with the decades-old Automated Clearing House (ACH), where transfers typically take two-to-five business days to clear. The process will also occur without the usual high fees – transactions under $10 are free, while Dwolla only charges 25 cents for transactions above that.

BBVA Compass, a subsidiary of Spanish parent company BBVA group, is one of is one of the 25 biggest commercial banks in the U.S. by deposit market share. The move comes as part of the bank’s plans to become digital-first in everything it does.

The partnership  was originally announced in October, but has taken until now to come into effect. It also marks the debut of FiSync’s use of authentication and tokenization processes, which remove the need for account holders to provide sensitive bank account information or credentials to Dwolla or any other party it transacts with.

“Over time we see Dwolla as a network belonging right besides Visa and Mastercard, and things like Square and PayPal and Google Checkout,” Milne told Forbes. “Visa and Mastercard already offer the luxury of speed, but you suffer the cost. Now you can have the speed, without the cost of the infrastructure.”

“I think this will create a standard that other people can look at, including even the Fed, which is trying to create a real-time infrastructure in the next five to 10 years,” he added.

Related reading

a young man and woman sitting on a stone bench in the rain looking at a smartphone
biometric payment fingerprint
Mastercard shop
screenshot of winston churchill on new five pound note

Leave a comment