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EcommerceBytes-NewsFlash, Number 2948 - December 03, 2012 - ISSN 1539-5065    5 of 6

PayPal Rival Dwolla Launches Guest Checkout

By Ina Steiner
December 03, 2012

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Dwolla launched a Guest Checkout feature to allow shoppers without a Dwolla account to purchase from merchants who have integrated with the online payment service. Unlike PayPal, which charges a commission plus per-transaction fee and allows shoppers to use a variety of funding sources, Dwolla charges a flat-rate of 25 cents for transactions and uses only the shopper's financial institution to pay for transactions. With Friday's launch of Guest Checkout, now anyone can use Dwolla to make a one-time payment from their financial institution to an online merchant or marketplace without signing up for a Dwolla account.

Merchants must integrate with Dwolla in order to offer Guest Checkout. Customers who check out as a guest are routed to Dwolla's offsite gateway where guests fill out basic personal information and verify their phone number. They then use Dwolla to connect to their financial institution, review their shopping cart, and pay.

Dwolla spokesperson Jordan Lampe said, "We purposefully designed Dwolla to make it a risk-free, easy-to-integrate, and complimentary way to save our merchants millions in swipe fees. When you combine that, our flat 25 cent fees, and an active user base, merchant adoption has been remarkably easy."

Dwolla had 100,000 users and 15,000 merchants as of April 2012, according to Lampe, who declined to provide the company's annual payment volume.

Can any merchant integrate Dwolla on their ecommerce platform, and is it really only 25 cents for online orders that come through on their website? "We have multiple checkout options, shopping-cart plug-ins, and APIs, and all payments are only 25 cents, unless under $10 in which case they're free," Lampe said.

When asked if Dwolla was accepted on any marketplaces, Lampe said, "A lot of niche markets use Dwolla to either accept payments or payout to the community for the goods and services sold. Payouts are an extremely popular use of Dwolla."

Along with the new feature, Dwolla introduced "Dwolla price," which lets merchants pass along the payment-processing costs to shoppers to entice them to choose Dwolla as a payment method.

The company explains, "Discount your price by half of what you saved in credit card fees. If your product sells for $100 and your credit card processing fee would have been 3% (or $3), then the Dwolla Price would be $98.75. Thatís $100 - 1/2 of ($3 - the 25Ę Dwolla fee)." It offers merchants a calculator on the Dwolla website.

The company also suggested merchants consider offering upgraded or free shipping, explaining:

"If you sell your products online, consider giving your customers free or upgraded shipping if they pay using Dwolla. Remember that bank-to-bank transactions can take a few days to settle, especially if itís a weekend or holiday. Your business might not ship the item until the funds settle in your bank. Giving customers faster shipping will help make the choice to use Dwolla that much easier."

EcommerceBytes wanted to know if the guest checkout feature was an attempt to increase merchant adoption. Lampe said, "Everything we do is to improve the network. In this case, we're removing ourselves from the equation to provide a better experience for both the consumer and the merchant."

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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