Dwolla Brings Commerce to Promising New Heights

Lately, Dwolla has garnered plenty of hype. The mobile payment platform, which fosters money exchange by way of both proximity and social networks, among other…

Lately, Dwolla has garnered plenty of hype. The mobile payment platform, which fosters money exchange by way of both proximity and social networks, among other channels, has made purchases possible with a set of tools not before realized. In short, as explained by Jordan Lampe, director of communications for the brand, “It’'s a fundamental (almost philosophical) shift from traditional networks.”

What’s particularly unique about Dwolla’s hype is not so much its current market share, but instead, its potential to create a new market-within-markets altogether. Until recently, its main function was to allow users to send money to one another using contacts on Facebook, Twitter, email, SMS, and LinkedIn, all for a flat fee of 25-cents, far below the cost of its nearest competitors. Dwolla’s most recent development, though, is Proxi, a GPS-based system built into the mobile app that identifies Proxi users within one’s immediate vicinity, then allows those users to send money to one another. The social implications are appealing, in that the system allows you to send money directly to those nearby, but the possibilities for commerce are particularly intriguing, geared more toward redefining the avenues for exchange than adding another component. “What's unique is that we are at heart a payment network, not just a platform,” Lampe explained. “This allows us to integrate our technologies into whatever mediums the mass market adopts.”

Take, for example, a recent exampled provided to Tech Cocktail by Dwolla-founder Ben Milne: you enter a coffee shop, and Proxi uses GPS to identify your location. It then recalls your last order and asks you if you’d like to place it again. By directing it to do so, Dwolla places your order and sends money to the merchant, and you retrieve your drink. Unlike near-field communication chips, which received plenty of attention last week with the launch of Google Wallet, Proxi relies entirely on software, not requiring that merchants install any new hardware. “The current trend is to minimize and consolidate technologies into singular platforms (see: iPhone). So what if we viewed this evolution in retail commerce as a software-based integration, not a hardware-based one? What if we could eliminate the need for merchants to purchase new NFC readers, while avoiding new fees from new parties?” Lampe asked.

Fortunately for users, Dwolla also released a software developer kit, so, as Lampe explained, third-parties “have access to innovation on top of a payment network. From here, industrious developers can use products, like Facilitator, to build out solutions for industries (like taxis) while taking part in a capitalistic exchange.” For now, merchants are utilizing several more direct routes, the online Merchant Kiosk, a specific merchant app, general applications for Android, iOS, and Windows, and any web-connected device.

With the possibilities for expansion so great, Lampe said, “Dwolla is growing disproportionately to the technologies currently available in the mobile payments space.” While still addressing the possibilities of integration with certain competitors, the brand must also consider leaving them behind entirely. “The demand for our mobile payment network is growing,” Lampe added. “We can't let the limitations of certain current technologies, like NFC, which operate inside very closed ecosystems (must have Android, must have the Nexus, must have Citigroup, MasterCard, etc.), hinder our potential growth.”

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