In an effort to make its style of alternative mobile and online payments more accessible, Dwolla launched several new features Friday.
Among the recently released functions is a "guest checkout" element that will give buyers that have yet to use Dwolla a way to try it out.
At the onset, guest checkout will work with 21 merchants, including philanthropic websites Angelwish and Givr. It will require users to fill out an internet form with their bank account and routing information instead of their credit card information. Buyers will also be required to give their names, addresses and phone numbers in order to complete those transactions.
This "is about addressing one of our own shortcomings: the 'chicken or the egg' dilemma," said Dwolla spokesman Jordan Lampe, in a blog post. Up until now, "Dwolla merchants have been dependent on whether or not their customers have a Dwolla account to pay with Dwolla ... For the last year, we've been hard at work improving Dwolla in order to open our network and set it free."
Rick Oglesby, senior analyst at Aite Group, gives the approach high marks. "This is smart, it's a step towards making Dwolla an 'open loop' payment network through which any consumer can pay," he says. "Additionally, through the process of paying as a guest, a consumer will provide most or all of the information that is needed to enroll, so it will be a good opportunity for Dwolla to enroll these consumers at the point of payment. A key challenge will be to get consumers to choose the Dwolla payment in an environment where alternatives exist. It's a smart strategy but definitely not a silver bullet."
Another new feature from Dwolla, called Request, integrates with point-of-sale systems such as ShopKeep and Change — both of which operate cash register apps over mobile devices, such as Apple's iPad. This allows the point-of-sale endpoint, not Dwolla's app or mobile wallet partner, to initiate a payment and send the customer a push notification on her phone to authorize the payment. This eliminates the need for a Dwolla user to have to open the app, select the merchant and type in the payment amount.
Oglesby's reaction to this feature was mixed. "It's a step in the right direction but it's not all the way there," he says. "Having a consumer send money to a merchant can be a clunky experience, there's lots of opportunity for errors, and the transaction takes considerably longer than swiping a card or paying cash. This should reduce errors and the time it takes to complete the transaction, but it still requires the exchange of user information (the user must provide Facebook, Twitter or email ID to the merchant, the merchant can then send the request). The consumer then needs to authorize the payment, which will also take time." He expects to see Dwolla gravitate to barcodes or NFC eventually.
A third new feature the Des Moines, Iowa company announced this week is a Dwolla Price plugin that will give sellers a way to display better deals to customers who choose to pay using the low-cost service, which only charges a quarter per transaction to merchants (the transaction amount must be more than $10). The idea is that sellers will pass on approximately half the cash they save on transactions (debit, credit or otherwise) to their customers, and display the cheaper Dwolla Price next to the higher non-Dwolla price.
The Dwolla Price feature is a stab at creating rewards, said Jim Van Dyke, president and founder of Javelin Strategy & Research. "It's a big deal on two levels. One is the fact that they are [encouraging merchants] to pass rewards on to the consumers, as obvious as that sounds," he says. "Many of these payments players skip that all together. Dwolla introduces transparency: 'I'm saving 10 dollars.'"