Payment network Dwolla today, Aug. 4, announced a new addition to its platform, Dwolla ACH API. The new API integrates ACH (automated clearing house) features into daily business processes and gives smaller businesses access to the same type of automated payment transfer management previously available only to larger corporations.
Dwolla’s goal in creating the new tool, according to Jordan Lampe, director of communications and policy affairs for Dwolla, who spoke to Small Business Trends by phone, was to “modernize ACH” and bring it into the 21st century, to operate in line with other digitized business processes.
“ACH has many positive aspects,” Lampe said. “It’s ubiquitous, low-cost and flexible compared to credit cards. On the flip side, it has no API associated with it; there are no ‘webhooks’ (notification features) and no way to automate its integration into other platforms. It’s a 40-year-old financial transaction network that is not compatible with modern digitized business tools and practices.”
Dwolla made a name for itself in the small business world a few ago by reducing payment transaction fees, compared to credit card readers and payment providers such as Square and PayPal.
While the company still retains that focus, in recent years Dwolla seized upon a new opportunity by converting its payment network into a platform with which other platforms can integrate via APIs. (API stands for “Application Programming Interface,” which is a set of tools used to build software applications.)
Not a Tool for Small-Small Businesses
Lampe clarified that the new tool is not something small-small businesses could use but is intended for bigger companies that process several hundred ACH transactions per month, and that need a better, easier and faster way to manage them.
“Business with one-bookkeeper, HR person or executive assistant would likely defer to paying a premium for an ACH product through an existing Freshbooks or Sage-like platform,” Lampe said. “But as the company scales and needs to coordinate 500 to 600 payments a month to and from employees, vendors and clients, a more integrated backend process might be necessary. “
He cited, as an example, a company that has a website to take online orders from customers or a mobile web app for employees to issue invoices and track jobs.
“They may want an integrated ACH solution to automate all of that,” Lampe said. “That’s where Dwolla’s API would come in and help them save boatloads of time and money.”
How Dwolla ACH API Tool Works
According to Lampe, some programming is required to integrate the ACH API tool into a business process, so it’s not turn-key right out of the box. Once set up, however, no further technical know-how is needed.
A single administrative dashboard contains all the information and presents it in a visual orientation that includes charts and graphs. Users can quickly look up and edit customer information from within the dashboard.
“Customer and transaction data will be arranged in a way that provides a straightforward look at the health of the business and makes it easy to establish and analyze business trends over time,” a post on the official Dwolla Blog explains.
Other features include the ability to search for and view transaction details to assist in the reconciliation process and to run basic accounting and business operations faster.
“Small businesses buy ACH access from banks and credit unions all the time,” Lampe said. “We’re offering them no-tech-know-how required tools (with free transactions) or tech-powered small businesses with APIs in ways that are modern and efficient.”
Tech Platforms Primary Audience
While small businesses can use the ACH API tool, the primary target audience consists of technology platform providers that wish to integrate payment processing management in a “white label” fashion (no Dwolla branding appears).
The blog post announcing the new tool says, “Today, we released an intuitive new dashboard for White Label partners to manage customers, view transaction details, and discover business trends.”
The “partners” to which the post refers, are, for the most part, technology platform providers.
For example, RentMonitor uses Dwolla’s platform to facilitate ACH payments between tenants and landlords; Goat, a mobile retail marketplace, relies on it to process transactions between buyers and sellers; and Popular Pays, an Instagram advertising network, utilizes it to automate payouts from brands directly into ad creators bank accounts.
Dwolla ACH API Cost, Benefits
Dwolla’s new ACH API tool comes with a steep price tag: $1500 per month, according to the company’s website. However, for those that need an easier way to process and monitor a high volume of ACH transactions or integrate with other platforms, the cost may be very worthwhile — particularly considering the benefits, which include the ability to:
- Integrate and manage ACH with other platforms more easily;
- Reduce manual processes and save on per transaction fees (Dwolla charges no transaction fees);
- Easily manage customers, view transaction details and discover business trends;
- Onboard customers without handling their sensitive bank account information;
- Offload any necessary identity verification requirements to the platform;
- Monitor for fraud and risk in the network;
- Remove the need for white label partners to build a customized dashboard;
- Integrate payment status updates to communicate with end-users, and more.
The new ACH API tool is available for use now. Visit the Dwolla website to learn more.