Payment network operator and development firm Dwolla, in an effort to speed up traditional ACH banking transfers has announced “Next Day Transfers”.
As the name implies, Dwolla Next Day Transfers will help small to medium sized businesses (SMBs) replace the existing tediousness surrounding paper checks by cutting down transfer times to as little as two business days. Given Dwolla is its own standalone payment network, the firm has found a way to reduce bank transfers in and out of the Dwolla network to reach the impressive transfer time.
“The automated clearing house (ACH) plays a critical role in processing tens of trillions of dollars to settle payments made via checks, debit cards, and even credit card payments, but it’s often seen as slower than alternatives and harder for SMBs and consumers to use daily. Dwolla helps anyone tap into ACH’s strengths, like ubiquity and low-cost, while providing easy-to-use tools, the same next day speed the biggest businesses get access to, and new security measures, like tokenization, to help modernize ACH,” said Ben Milne, CEO and founder of Dwolla.
Along with the announcement of the new service, Dwolla released research findings related to the cost of writing and issuing checks for SMBs. The data shows that 66% of SMBs located in the US spend an average of $858 a year on maintaining paper checks. All in all paper checks cost small businesses in the US roughly $13 billion each year, and includes the cost of labor, supplies, maintenance, and wait-times
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“Small businesses are writing a $13 billion check each year for a process that does nothing but cause headaches and hurt their bottom line. Issuing paper checks is an old and manual process that clouds a business’s ability to make real-time decisions and get paid faster, but existing platforms have been too expensive and complicated to set up and integrate for the small or non-tech businesses,” Anne Driscoll, vice president of marketing at Dwolla, said in a press release.
Dwolla main premise has been to create a payment network designed for the internet, rather than adjusting current networks and technologies for the web. This last October Dwolla, shortly after halting support for Bitcoin exchanges, released a new credit scheme designed for the internet called Dwolla Credit, replacing the need for a credit or debit card issued by a bank, by offering an online line of credit through ADS.