Dwolla Gets Funding to Expand Its Payments Network

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    Dwolla announced that it has raised $9.7 million in funds to help it expand its services. The small company hopes to help businesses (and consumers) do away with the banking paper trail by providing a “scalable, global payment network” that uses a cheaper pricing model for money transactions.

    In a previous post, I explained how the company was attempting to kill off paper checks with its easy-to-use and inexpensive money transferring platform. Dwolla has already been creating a stir among other payment companies, such as PayPal, which also announced that it is splitting from eBay next year. By providing an “independent platform” via which businesses and consumers can pay one  another without the usual banking fees, Dwolla has gained popularity.

    According to TechCrunch, the latest funding is lead by the CME Group, along with current investors Union Square Ventures, Village Ventures and Andreessen Horowitz.

    In his recent blog post, Dwolla CEO Ben Milne announced the inclusion of the CME Group in its investor lineup and explained how the latest funding might influence the company’s future:

    “Today, we’re announcing and welcoming our newest investor, CME Group (NASDAQ: CME). As the world’s leading and most diverse derivatives marketplace, CME Group brings 150-years of industry leadership, innovation, and institutional knowledge. They will have an immediate impact, helping us realize, accelerate, and distill Dwolla’s potential to you, to enterprises, and to the world’s marketplaces.”

    Milne’s blog also hints at areas the company may be expanding its technology into, including large enterprise and government. He envisions the company’s expansion and its current usage:

    “Today, we’re designing the playbook for a new payment infrastructure. What we’ve built is extremely complicated. It’s fast, it’s got great security, and we have all the building blocks in place. In fact, you’re already using them all today, saving yourself and the community millions every year in fees. Replacing a check, paying back a friend, sending money to vendors, or paying your property tax, Dwolla is growing, and will continue to, by solving simple problems.”

    Earlier this year, Dwolla announced that it had established partnerships with both GoDaddy and Amazon, according to TechCrunch. The company’s current transaction fee is free for amounts less than $10 and it charges a flat rate of $0.25 for transfers over $10.

     Kim Mays has been editing and writing about IT since 1999. She currently tackles the topics of small to midsize business technology and introducing new tools for IT. Follow Kim on Google+ at or Twitter @blumoonky.

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