Dwolla Review (2018): Complete analysis on this payment method


Dwolla used to be a P2P bank transfer platform that also served businesses. But it no longer has anything to do with that.
This is not to say that Dwolla no longer offers bank transfers. It does. In fact, that is the core of its services. But instead of a PayPal-like platform that uses transfers instead of credit or debit cards, Dwolla has become a more developer-friendly software option for companies that want to integrate white label bank transfers into their system.
Dwolla is not a third party platform like Stripe, PayPal and Square. Technically, it is an agent for the banks and credit unions with which the company has partnered: Veridian Credit Union and Compass Bank. This means that their contractual terms and obligations as a service provider are different.
dwolla review
Although the company claims to be extremely developer-friendly, we would not call Dwolla “the Stripe of Transfers”. On the one hand, its pay-per-use processing model (for merchants who simply want to accept payments from their customers) is still in beta. For everyone else, Dwolla works more on a contract/SaaS model that says it allows access to predictable prices, but may seem expensive compared to other options.
The platform is not exactly as feature-rich as Stripe, but Dwolla has adapted its platform to a high-end, technologically savvy customer type. And, in fact, ecommerces can experience advantages by relying on bank transfers rather than card payments.
First, customers change their bank account much less frequently than their debit or credit card, which means that a company won’t have to deal with so many failed transactions due to an error related to this aspect. Second, Dwolla’s business model allows you to send, receive and hold funds in an online wallet, so you have more options than just accepting payments. The company also offers merchants same-day or same-day transfers.
Dwolla could be a good solution for some companies, such as B2B business or billing services. Dwolla’s current customer base uses this platform for gig economy apps, employee rebate apps, marketplaces, plus real estate investments and loans. It’s a flexible platform that allows you to move money in ways that many credit card platforms don’t support. We also like that you can combine Dwolla with card payment options.


White Label Payments
Development tools available
Various customer service options


Potentially expensive
No credit card accepted
Limited functionality

Main features of Dwolla

The concept of Dwolla is simple: Payments by bank transfer. You will not find payment by card, crypto-currency, PayPal, or any of the other online payment alternatives in use today. Pure, simple, bank transfers.
That said, Dwolla is actually quite versatile when it comes to this type of payments, and is based on a platform easy to use for developers. It’s not just about accepting . This is what you can do with money:

  • Receive payments
  • Send payments
  • Receive and send payments
  • Facilitate payments: This means you can create a platform that allows users to send funds to each other without you, the merchant, having to do anything. You can also charge a facilitator fee for the transaction to monetize the platform. In addition, you can keep the balance inside Dwolla, like in a digital wallet).

Dwolla user accounts

An important step with Dwolla that you won’t find on most credit card processors is the need for users to verify their accounts. Dwolla offers two options to do this:

  • Instant account verification. This requires users to enter their bank accounts online through a secure window.
  • Micro-deposits. They send a small amount to a bank account to verify the information. Obviously, microdeposits take a little longer to start and clear (a few days), but it’s up to you (and/or your customers) to decide which method you prefer.

Dwolla separates these user accounts into three levels: Receive Only, Unverified, and Verified.

  • Customers who only receive information provide the least amount of information, but as a result they can only receive payments. They don’t go through any kind of verification process.
  • Unverified accounts can send and receive funds, but are limited to sending $5,000 per week. Unverified accounts collect only the customer’s first and last name and an email address. However, at least one of the parties to a transaction must be verified. Unverified customers are also unable to maintain a balance within Dwolla.
  • Verified accounts are subdivided into two categories: personal and business. A verified merchant account can send and receive funds up to a limit of €10,000 per transaction; a verified merchant account can send and receive up to €5,000 per transaction. In both cases, the customer can maintain a balance within Dwolla (perfect for marketplaces).

Other features

A couple of additional features with Dwolla are recurring payments and on-demand payments. Recurring payments are quite obvious: a subscription management tool in which your customers pay the same amount each month. On-demand payments work with metered billing so you can charge a variable amount each month depending on usage.


Dwolla helps keep transactions secure in several ways: first, you can implement Dwolla.js, a client-side Javascript that will transmit information (including bank account and routing number) without the information passing through your servers. This removes part of your company’s security burden and prevents secure information from passing through your own system.
Second, Dwolla also offers tokenization. Instead of transmitting real account numbers, the data is encrypted and replaced with another number before being sent over the network. Tokens have limited use and therefore, even if they are intercepted, they cannot be reused. Many POS systems and even some online credit card processors have also begun to implement tokenization.

Integrations and add-ons

As for integrations, Dwolla says they are agnostic to technology and work well with other services you want to integrate. However, they don’t have a list of specific integrations and ready to choose, which makes you think everything will be customized. However, Dwolla mentions two ready-to-use integrations:

  • Plaid: A bank verification service. Plaid allows users to link and verify their bank accounts by simply logging into them. Plaid tokenizes and stores that information, so merchants don’t have to worry about security.
  • Sift Science: A fraud verification platform. It uses big data and machine learning to evaluate each transaction and analyze the possibility that it is fraudulent.

Dwolla Rates

The rates are indicated in dollars because that’s how they are offered on your page. Dwolla technically offers three pricing plans: Start (a pay-per-use model that will be available from 2019), Scale (structured and predictable rates) and Enterprise (fully customized). The Start plan is still in beta, so it is not widely available. This will be the option that will attract merchants who want to process transactions directly.
dwolla plan

Start Plan:

  • 0$ monthly fee
  • 0.5% per transaction
    0.5$ minimum. Maximum 5$.

The Start plan has its limitations: you can’t access certain features (such as same-day and next-day deposits, on-demand payments, and balance holds).
Merchants in this plan also get more limited customer service: there is no phone or slack contact, and there is no dedicated account representative or integration engineer for support.

Scale Plan:

Starting at $2,000/month
That’s all the information that Dwolla reveals. However, we know that the monthly fee is consistent and is not based on the number of transactions processed in a given month. So even if you have a busier month than usual, you’ll pay the same as long as your contract is in force. The total volume probably plays a bit into the establishment of your monthly fee, but Dwolla doesn’t give details on how prices are evaluated.
You should keep in mind that you are paying for more than transfers. Dwolla offers you a complete package of services with some additional features. In addition to a dedicated customer service representative, you will also receive integration support directly from Dwolla so that you can implement your payment system more quickly.
In addition, the Scale Plan includes the ability to facilitate payments and charge a fee for it. The Start Plan does not. Dwolla says the facilitator’s cost should be a minimum of $0.01 and can be up to 50% of the transaction amount, so it is possible to recover some of your monthly processing costs. Other features available in the Scale Plan but not in the Start Plan include the ability to maintain balances within Dwolla and set up “verified customer” accounts. Verified customer records can be very important, especially for certain industries that must comply with Know Your Customer (KYC) requirements.
Finally, with the Scale Plan, you can access transfers the next day or on the same day, although at an additional cost (which they do not specify).

Enterprise Plan:

Custom Pricing

With the Enterprise Plan, you get custom pricing and everything that the Scale Plan offers. In addition, Dwolla offers some additional benefits to business customers, including technical and information security support, as well as prioritized support and assistance for feature development.

Transaction limits:

We like that Dwolla is transparent when it comes to transaction limits, with the information quite clear in the terms of service. We will translate it for you below:
4. Transaction limits
4.1. Account Limits. You will be limited in the amount of money that can be sent from your account in each transaction. This per transaction limit varies depending on your account type. Personal accounts have a sending limit of $5,000 per transaction. Bsuiness, Non-profit and Government accounts have a spending limit of $10,000 per transaction. We reserve the right to lower your shipping limit at any time, and for any reason.
4.2. Increased Limits. You may request an increase in the shipping limit. Approval is solely up to Dwolla and may be re-evaluated and/or revoked at any time.
A maximum transaction size of $10,000 should be enough for most businesses, but you can increase the limit if you normally deal with much larger numbers. That’s something you should talk to Dwolla about from the beginning, obviously.