We have discussed Dwolla recently when they decided to . The decision to drop the cryptocurrency does not seem to have put a break on their expansion and to offer innovative new payment methods, and today Dwolla has announced that they are going head to head with the card companies by offering their new payment method, “Dwolla Credit”.
Dwolla in partnership with Alliance Data Systems Corp (ADS), a branded card issuing company, are now offering lines of credit to be used for online purchases. The option will first be made available for 40 online merchants who already accept Dwolla as a payment option. Companies like Fiverr, Humble Bundle, Karma, Ribbon and more have already announced support for Dwolla Credit.
Dwolla Credit in comparison to similar services like PayPal, MasterPass and Login and Pay with Amazon, does not link to your existing credit card, but is is the actual payment method in itself. Dwolla Credit, much like Dwolla’s standard service links to the consumer’s and merchant’s bank accounts, and payments will be processed in real time.
ADS is the entity that will be responsible for evaluating and approving the lines of credit. The process will be no different than the one implemented now by card issuing companies, and the consumer’s credit risk levels will be evaluated before the line of credit is approved. The only main difference is that no physical card or card number will be issued, and the line of credit will be associated to consumer’s Dwolla account.
All fees associated to the new service will be identical to Dwolla’s current fee structure, no fees for transfers under $10 and a $0.25 cent flat fee for any amount over $10.
Dwolla Credit is currently in beta stages, and Dwolla will allow a small amount of testers to try out the service and provide feedback. Dwolla will be rolling out invites in the coming weeks and plans to launch the service to the general public in Q1 of 2014.
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