By: Ben Milne,

Why we changed the game

Currently, payment networks are something which control you. We think it should be the other way around. Grid will redefine the way you interact with the Dwolla payment network, setting a new precedent for the way you interact with any payment network.

Think about it. Every time you want to do seemingly simple things, like buy a coffee, order some new shoes, or acquire some shampoo, current networks are requiring you to leave  an ugly trail of personal and financial data behind you. It’s a major liability to you, the consumer, the network, and the merchant, and it is a major source of card fraud (which costs $8.6 billion in United States alone). This is because when you use your card you leave behind:

These are really the only things someone needs to commit fraud. So every time you physically hand over a form of plastic to purchase a goods or services, you are exposing yourself for fake swipers, camera phones, heck, even a pencil and paper.

The question here seems relatively simple: If the big guys could start over today, would they really choose to build a system that inherently exposes them, their clients, and their merchants to such massive liability? I doubt it.

Second, since we aren’t bound by typical card processes, why not do it differently?

The answer also seems relatively simple and obvious: let’s rethink the whole thing… That’s precisely what we did with Grid.

What does this thing do?

Think about all the cool stuff Dwolla does?

Imagine just being able to pull that into your home banking solution or paying for a Zaarly purchase in the app, or make payments in a grocery store. Imagine managing permissions to the application independently, allowing you to view and manage all applications, in real-time, you have access through our website.

Why this is huge for developers

The sky is the limit. For the first time ever, developers will have access to a payment network to innovate and build on top of and because the network is devoid of payment information, you remove a lot of liability that is typically associated with plastic networks (e.g. storing financial information and credentials, and pre-loading accounts or converting to a virtual credit system). You can actually implement cash into your software by integrating with this connect methodology.

To get started just hit the developer boards here. You can get your API keys by logging into your Dwolla account and clicking Privacy. All self service. Documentation is hosted here.

Why this is huge for merchants / banks / third parties taking payment

In app/web purchasing just got really easy for developers without all the risk of storing cc/bank information. I don’t think I need to spend much time explaining to content publishers, business owners, or anyone else the value of that  (hint: cost savings).

How much will Grid cost?

Access is free for everyone. Any developer can apply to use it. Heck, Square could even easily leverage Dwolla to increase its margins (we assume that they’d charge the merchant their same typical fee), as could Google. Will they? Well, who knows, but we still think it’s cool. We will still capture our regular fee of 25 cents on transactions over $10, while keeping those transactions of $10 and under completely free (note: this is still far cheaper than the usual 2-6% interchange and 30 cent processing fee of other networks).

We are working through implementation with half a dozen companies and will be happy to share those with you soon.

Ironically, the cash option might have just gotten more secure than the plastic option.

We believe that you should be the center of the payment network. Grid lays the groundwork to make that happen because at Dwolla, you are.


6.7.2011 at 3:10pm CST: Although distribution of the Grid (aka our Oauth API) for third-party development is free, we will still be accruing our 25 cent fee on transactions over $10.

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Financial institutions play an important role in the Dwolla network.

Dwolla, Inc. is an agent of Veridian Credit Union and Compass Bank and all funds associated with your account in the Dwolla network are held in pooled accounts at Veridian Credit Union and Compass Bank. These funds are not eligible for individual insurance, including FDIC insurance and may not be eligible for share insurance by the National Credit Union Share Insurance Fund. Dwolla, Inc. is the operator of a software platform that communicates user instructions for funds transfers to Veridian Credit Union and Compass Bank.