Dwolla Introduces MassPay Feature to Help Businesses Process Bulk Payments

Today Des Moines, IA-based online payments platform Dwolla announced the launch of its MassPay, which will allow anyone to send payments to up to 2,000 recipients by simply uploading a spreadsheet with their contact information and the amount they want to send. The company is debuting the feature with eight new partners, all companies that send bulk payments including carsharing startup Getaround and freelance writing community Scripted. To date, the company has more than 100,000 users and 15,000 merchants, and now handles over $1 million in transactions every day.

“Dwolla was started as a way to bypass traditional credit card fees, you know whenever you swipe your card, there’s a 2.7 percent plus fixed costs, those fees are embedded in the networks that currently exist,” Director of Communications Jordan Lampe said in an interview. “The way Dwolla works currently is on the back of an entirely new network we’ve built, where we decided to take 21st century technology and re-imagine what the preferred way to send money would look like in 2012 and not 1969.”

MassPay is a new service the company is targeting at businesses to help them tackle paying a large number of freelancers or partners, like publishers and app development companies. As opposed to wiring money to hundreds of accounts or writing and mailing checks, companies with a Dwolla account can choose a funding source to draw from (either their Dwolla balance or connected bank account) and upload a spreadsheet which could include as little information as the amount and the recipient’s email, phone number or Dwolla ID. The system then sends notifications to recipients that the money is in their Dwolla account, which they can then withdraw to their bank account.

The company’s eight new partners include Parking Panda, which will use it to pay their partner parking lots, and Major League Gaming, which uses the platform to pay out winners of their online games and contests.The key value proposition Dwolla offers is its cost structure, with its payment network services free for transactions under $10 and $0.25 for every transaction over that amount. PayPal also offers a mass payment solution, however it only allows up to 250 batch payments at a time, in contrast to Dwolla’s 2000, and it charges a 2 percent transaction fee (capped at $1 per payment).

With traction picking up for its network in Iowa, California, New York, and Texas, the company continues to grow and gain visibility as a viable alternative in the online payments space. With its eyes currently set on wrestling away some of the market share from traditional heavyweight financial institutions in the U.S., the company recognizes its solutions could benefit other countries, both with established financial systems and those in the process of developing them.

“You look at anywhere where there’s a pain point or friction in the market whether it be cost or regulation or behavior, when you see those, they’re market opportunities, for example in places like Africa…there is opportunity to bring a network and do economic good, so we do have global aspirations, but right now we’re looking at a $34 trillion market in the US,” Lampe said. One of PayPal’s advantages is that users of its mass payments solutions can send payments in 22 currencies to users in 190 countries, so while it might be more expensive, it supports global businesses, or people with freelancers in multiple countries (though processing payments outside the U.S. comes with a $20 per-transaction fee cap, as opposed to $1 in the U.S.).

Dwolla has been busy this year, announcing a partnership with mFoundry’s mobile banking product FinX, which lets banks the leverage Dwolla as an extension of their core mobile banking platform. It also raised $5 million in Series B funding earlier in the year from Union Square VenturesVillage VenturesThrive Capital and other investors. With the online and mobile payments space heating up, Dwolla is well-positioned to be a go-to solution for both merchants and consumers who are looking to get away from using credit cards, and the fees that come along them them, though it’s not a household name like PayPal quite yet.

Humayun Khan

Humayun Khan

Humayun Khan is a Senior Writer and Analyst at BetaKit. A marketing graduate with honors, Humayun's work experience spans the fields of consumer behaviour with noted contributions in an academic paper published in the Journal of Consumer Psychology and market research consulting having coordinated projects for a major financial services client at Decode Inc. More recently he was involved in business strategy as a Business Analyst for an equipment rental outlet and prior in the National Marketing Department at Ernst & Young LLP. He is passionate about emerging and disrupting technology and its ability to transform and create entirely new industries.

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