Dwolla made a name for itself by making it easier and more affordable for users to transfer money to one another online. Now, nearly four years after launching, the startup is making its first foray into credit payments.
Dwolla announced Tuesday that it has partnered with Comenity Capital Bank to launch a new credit payment option that lets users purchase items through the Dwolla network without a credit card. The option is currently in beta and Dwolla will accept new users and merchants gradually until early next year, when it plans to launch the option to the general public.
With Dwolla Credit, users can purchase an item online without having to enter in a 16-digit credit card number and merchants can accept the transaction without paying steep interchange fees. Dwolla plans to charge a fee of $0.25 for every transaction above $10 and nothing for transactions that come in less than that, just as it does with money transfers.
At launch, there are more than 40 merchants in the Dwolla store that will accept the credit payments:
“Credit is not new, but providing it on a real-time network that avoids interchange fees, ditches plastic cards, and positions credit to evolve is, and that’s what Dwolla Credit does,†Ben Milne, founder and CEO of Dwolla, said in a statement.
Some of the details need to be worked out during the beta period. A rep for Dwolla told us that users will get some kind of statement at the end of a designated payment period that looks like a credit card statement. However, the startup has yet to decide whether and how much it should charge for interest on late payments.
Image: Dwolla
No comments:
Post a Comment